As fuel prices rise, US lawmakers push to suspend the federal gas tax

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WASHINGTON (AP) — As the war in Iran pushes U.S. gas prices toward $4 a gallon nationally, some lawmakers are pushing to suspend the federal gasoline tax in the latest attempt to try to control surging energy costs. Lawmakers say the action would provide much-needed relief for families and businesses that rely on their cars and trucks to get to work and school and run everyday errands. Asked about the gas tax at a Cabinet meeting Thursday, President Donald Trump said he has “thought about” suspending it but suggested states should consider suspending their fuel taxes. “People have talked about” a gas tax suspension, Trump said. “It’s something we have in our pocket if we think it’s necessary.” As gas prices have spiked, the Trump administration has released millions of barrels of oil from the U.S. Strategic Petroleum Reserve and temporarily lifted sanctions on some Russian and Iranian oil shipments already at sea. The U.S. is negotiating with countries reliant on Middle East crude to join a coalition to police the Strait of Hormuz, where about one-fifth of the world’s traded oil normally flows. Here's a look at what a gas tax holiday is and its potential impacts. Temporary suspension of the federal gas tax A gas tax holiday is a temporary suspension of the federal gas tax, currently set at 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel. That does not include state taxes, which often are higher. The tax provides more than $23 billion per year in revenue for federal highway and public transit programs. The president cannot suspend the federal tax on his own. Congress would have to approve the move. Both the House and Senate are controlled by Republicans, and bills on the issue are unlikely to advance unless Trump signals his support. Suspending the tax could provide some relief Rising gas prices are putting renewed pressure on household finances, especially for low- and middle-income Americans who have less flexibility to absorb higher transportation costs. The increases can influence how much people drive, where they travel and how they spend money on other things. “Trump’s war of choice with Iran is driving up gas prices across the country — and Americans shouldn’t have to bear the additional economic burden of Trump’s reckless decision making,” said Sen. Richard Blumenthal, a Connecticut Democrat who co-sponsored the Gas Prices Relief Act with fellow Democratic Sen. Mark Kelly of Arizona. The bill would suspend the tax through Oct. 1. A similar measure was sponsored in the House by Democratic Rep. Chris Pappas of New Hampshire. There are drawbacks, industry group says The gasoline tax is the single largest source of revenue for federal highway and public transit programs. While the House and Senate bills would offset any lost Highway Trust Fund revenue with general funds, the tax suspension could raise the federal deficit and jeopardize the long-term sustainability of investments for highway and public transit programs, according to the American Road & Transportation Builders Association, which represents the transportation construction industry. The group cites studies showing that many retailers do not pass on the full amount of the gas tax reduction to consumers. Research also suggests that state and federal gas taxes are just one component of a complex pricing scheme that includes the global price of oil and other factors, the group said. States are considering their own gas tax breaks Some states are taking action to lower the gas tax. Georgia Republican Gov. Brian Kemp on March 20 signed into law a 60-day suspension of the state’s 33-cents-per-gallon tax on gas and 37-cents-per-gallon tax on diesel. The law was supported by both Republicans and Democrats. Kemp said he wanted to “return taxpayer money where it belongs, in the pockets of hardworking Georgians.” Early results are positive for Georgia drivers. It takes a few days or more for the tax holiday to trickle through to pump prices, because wholesalers pay fuel taxes in the state. But while gas prices nationwide went up an average of 10 cents per gallon in the week that ended Thursday, they fell 15 cents a gallon in Georgia, according to motorist group AAA. On Friday, the state had the 13th-lowest average gas price among states at $3.60 per gallon. Kansas was the lowest at $3.27. Several states — including California, Connecticut, Florida, Maryland and Utah — have weighed gas tax holidays as a way to provide relief at the pump. Connecticut Democratic Gov. Ned Lamont recently suggested a temporary suspension of the state’s 25-cent-per-gallon tax on gasoline and 48.9-cent diesel tax, but it remains unclear whether it will happen. State officials are also discussing possible rebate checks for taxpayers to help blunt high energy costs. Florida Republican Gov. Ron DeSantis, who has supported past gas tax holidays, was skeptical that motorists would see real savings. “Our ability to influence fuel prices are really marginal,” DeSantis said at a bill signing ceremony this month, according to Politico. “Sometimes the prices get raised so the consumer doesn’t see any difference. … I think when we did it in the past … I don’t think the consumer really felt relief.” Driving habits can help reduce costs The top advice for drivers looking to save at the pump is to obey the speed limit and drive smoothly, according to Consumer Reports. Driving habits can play a significant role in fuel economy, the magazine says. Driving at a steady 55 mph can increase fuel economy by 6 to 8 mpg, the publication said in a report that offered tips to get the most out of a tank of gas. “Speeding up from 55 to 75 mph is like moving from a compact car to a large SUV,'' the article said. Beyond fuel concerns, speeding also is a safety risk. And drivers should avoid hard acceleration and braking whenever possible, and skip premium gas if their cars allow it, the magazine said. ___ Associated Press writers Jeff Amy in Atlanta and Susan Haigh in Hartford, Conn., contributed to this report.

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MATTHEW DALY, Associated PressBy MATTHEW DALY, Associated Press

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Jun 22, 2026economicUnverifiedIranChina

High oil prices drive a surge in Chinese electric vehicle sales, but charging networks lag behind

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High oil prices drive a surge in Chinese electric vehicle sales, but charging networks lag behind The war in Iran has helped reshape the global electric vehicle market, giving Chinese automakers an opening across the developing world as fuel prices surge The war in Iran has helped reshape the global electric vehicle market, giving Chinese automakers an opening across the developing world as soaring fuel prices push drivers towards electric vehicles, even as charging infrastructure lags behind a wave of imports.

The blockade of the Strait of Hormuz disrupted shipping of about a fifth of the world’s crude oil and liquified natural gas, first hitting Asia — the main destination for the fuels — followed by Africa. This shock accelerated a trend that was already spreading across the developing world.

In April, global exports of Chinese EVs hit a record $9.4 billion, according to an analysis by think tank Ember of Chinese customs data. Shipments surged to countries such as Australia, Brazil and regions like Southeast Asia and East Africa. China exported about 435,000 passenger EVs and plug-in hybrids in May, more than double from a year earlier, according to the Chinese Association of Automobile Manufacturers.

As fuel costs rise, more drivers are switching to EVs to save money, while governments from Laos to Ethiopia are embracing electrification to curb oil imports and reduce costs of fuel subsidies. But faster EV adoption is outpacing the expansion of charging networks.

Governments and state-owned utilities in Africa are taking a leading role in building them — a model analysts say could help other emerging markets, like Asia, speed the shift away from fossil fuels. When a nation lacks sufficient charging infrastructure and EV fleet size, it is a “classic chicken-and-egg problem” regarding what comes first, said Paul Gong, head of UBS bank’s China automotive industry research.

“At that stage, government support for infrastructure could help accelerate adoption,” he said. Fuel shock drives EV use in Asia and Africa Across the developing world, drivers are looking beyond the gas pump. In Southeast Asia, imports of Chinese EVs have surged in Thailand, Laos and the Philippines.

In May, Laos banned the import of fuel-powered vehicles for the rest of 2026 to cut oil import costs and encourage the EV shift. Africa imported around 44,000 Chinese EVs in 2025, a 130% jump from the year before, according to Chinese Commerce Ministry data.

Across Asia and Africa, transport is one of the largest household expenses. Limited public transit, long commutes and a reliance on private vehicles make families vulnerable to volatile fuel prices. In South Africa, transportation accounts for nearly a fifth of household spending, according to a 2024 study by Stellenbosch University in South Africa's Western Cape province.

So, as fuel prices surge, global interest in EVs has been growing, said Mark Wakefield, with the consultancy AlixPartners. One in four new cars sold worldwide last year were electric, according to the International Energy Agency. Global electric car sales are expected to grow further in 2026 and reach 23 million, making up nearly 30% of all cars sold worldwide, according to the IEA’s latest EV outlook.

“In the next five years, we will accelerate (our) overseas expansion,” said Jerry Gan, CEO of Geely Auto, one of China's biggest automakers, at a company event in March as the auto group makes inroad into regions like Southeast Asia including selling EVs.

Chinese automakers supplied around 60% of electric cars sold globally, the IEA said. They have also been targeting Europe, Africa and Latin America. In Vietnam, automaker VinFast also logged stronger sales. Demand from Southeast Asia helped drive a 42% year-on-year increase in the company's January-March quarterly revenue.

On most mornings, Nguyen Thien Bao threads his VinFast electric motorbike through the jammed traffic of Vietnam’s capital Hanoi — ferrying passengers and deliveries. The EV bike has sharply cut his expenses as fuel prices rise. “Before, so much of my income went into fuel,” he said.

“Now, I can actually save some money.” Charging stations aren't keeping up But while EV imports are booming, charging infrastructure is still lagging even as installations have accelerated. Thailand, for instance, has around 4,600 public charging locations to serve more than 424,000 battery EVs and plug-in hybrids, according to the Electric Vehicle Association of Thailand — around one for every 92 vehicles.

The country currently has roughly 12,000 public chargers, the IEA said. Chitsanupong Nuamnorm's solution is to keep his gasoline-fueled Mazda 2 for weekend trips, although the Chinese-made MG4 EV he bought on Feb. 27 — the day before the Iran war began — is saving him a lot of money.

Yutthana Samranwong, a 54-year-old driver in Thailand’s northern Phitsanulok province, says booking online for public charging ports to keep his MG4 EV running is a gamble. “It's a bit of a headache,” said Samranwong, who sometimes works with the Grab ride-hailing and delivery service.

In Bangkok, strained charging networks are prompting some drivers to consider returning to fuel-powered cars. In Malaysia, public fast chargers were up more than 70% in 2025, according to the IEA, after the government rolled out incentives to including a tax break for operators of charging points that meet certain investment criteria.

Indonesia has more than 4,500 public charging stations set up the state-owned power utility PLN, the IEA said. Ethiopia, which has banned non-EV imports, had only around a dozen charging stations as of mid-2025, and the government estimates it needs more than 1,170 stations to meet rising demand.

In the capital Addis Ababa, 40 stations are under construction, according to the state electricity utility. “In developing markets, affordability can accelerate the shift, but the pace of adoption will still depend heavily on infrastructure, power reliability and use case,” said Chris Liu, with the technology research and advisory group Omdia.

State utilities take the wheel to build charging stations In Indonesia, more than 4,500 public chargers have been deployed by its state-owned power utility PLN, the IEA said. African countries also are increasingly turning to state-owned utilities to build EV charging networks, betting public investment can solve one of the biggest obstacles to electric vehicle adoption.

“Utilities are recognizing that electric mobility will become a meaningful source of future electricity demand,” said Ndia Magadagela, co-founder and CEO of Everlectric, a South African commercial EV leasing company. There are around 2,000 public EV charging stations in Africa, with South Africa accounting for the largest share.

State-controlled utility Kenya Power plans to build 44 charging stations within the next year. But building networks of charging stations is difficult in developing markets, according to Omidia's Liu, who said grid connections and maintenance are key issues.

While BYD, for example, is expanding its ultrafast EV charging network in places like Europe, large Chinese automakers typically may have relatively little incentive to build networks outside China, he said. State-owned utilities, therefore, can play a larger role in this, according to Liu, since they are closely tied to a country’s grid planning, electricity pricing and distribution capacity.

“You need charging infrastructure to support an even larger fleet size,” said Gong, the auto analyst from UBS. ___ Olingo reported from Nairobi, Kenya, and Delgado reported from Bangkok. Associated Press writer Aniruddha Ghosal contributed to this report.

___ The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. The AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.

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