**This article has been updated to reflect the speech made by Biden this afternoon**
President Joe Biden is expected to call for a 3-month suspension on the federal gasoline and diesel tax during a Wednesday speech. Biden is also expected to call on states to take the necessary steps to remove their taxes on gas and diesel.
President Biden will be meeting with leaders from the petroleum industry later this week, but in his remarks today is going to address them.
The current federal tax on gasoline is 18 cents per gallon, while the federal tax on diesel is 24 cents per gallon. State taxes at the pump vary from state to state, with California boasting nearly a 54 cents per gallon tax on gasoline.
According to the administration, if all of these reforms are put through, the price of a gallon of gasoline could drop as much as $1. To reach this goal, however, several things entirely out of Biden’s control must happen.
Top Democrats have previously cast doubt on the efficacy of removing the gasoline tax. For example, former President Barack Obama said on the campaign trail in 2008 that a gas tax holiday was a mere “gimmick.”
Some economists have suggested that what savings would be made with this plan could be consumed by the petroleum industry raising prices.
Jason Furman, a senior economic official from the Obama administration, explained on Twitter, “Refineries are even more constrained now so supply is nearly fully inelastic. Most of the 18.4 cent reduction would be pocketed by industry – with maybe a few cents passed on to consumers.”
President Biden’s senior adviser for energy security at the State Department, Amos Hochstein, said that the President would demand that the petroleum industry pass the savings along to the public. However, Hochstein clarified that this would be extremely difficult.
Another senior White House official spoke to CNN and acknowledged that this “isn’t going to solve the whole problem.”
This afternoon, President Joe Biden spoke to the American public about his proposal to suspend the gas tax.
Joe Biden opened his remarks by explaining the history of the federal gas tax and its connection with the highway trust fund. Biden explained that under his plan, “we will still be able to fix our highways and bring down prices of gas, we can do both at the same time.”
“By suspending the 18-cent gas tax… for the next 90 days, we can bring down the price of gas and give families just a little bit of relief,” Biden continued.
President Biden also called on companies in the petroleum industry to pass along “every penny” of saving to the consumer. “There is no time now for profiteering,” he said.
President Biden called on states to either suspend their gas taxes or find another way to give people relief. Biden praised Connecticut and New York for their suspension of the gas tax and other states for similar efforts.
What was unexpected in Biden’s speech was his announcement that he has worked with the international community to release more oil into the market.
You can watch Biden’s full speech below: