Currently, the national average fuel price in the United States is about $5.00 per gallon. However, there are many states where gas stations list gasoline prices well above $6.00 per gallon, and diesel prices even higher. It’s starting to take its toll on the trucking industry, which now sees companies suspend shipments to renegotiate contracts, while angry consumers remember $2.17 for a gallon of gas in the summer of 2020.
Earlier this year, Congress and the White House proposed a moratorium on the federal fuel tax to ease the financial burden. But the idea was delayed because prices were relatively low at the time (about $3.50 a gallon), and criticism was mounting that it was simply trading one problem for another. Four months later, and things looked rather hopeless, the Biden administration dropped the principle of a moratorium on fuel taxes to help cushion the blow from record oil prices.
But the fuel tax has long been pegged at 18.4 cents a gallon, making any suspension a drop in the bucket — or, more accurately, literally in the tank. It also forced the government to find another way to help America’s troubled highway infrastructure, with concerns about where the money will come from. Despite the passage of a $1.2 trillion infrastructure bill, only $110 billion of the 2,702-page legislative package is earmarked for funding bridge and road repairs and improvements. The rest goes to promoting public perspiration, funding Amtrak, improving the national energy grid, clean energy programs, driving adoption of electric vehicles, broadband internet, and water conservation. However, the $300 billion previously earmarked for the Road Trust Fund over the next five years also remains.
At the same time, the federal gasoline tax brings in about $45 billion a year and accounts for nearly all of the federal spending on maintaining America’s highways each year. President Joe Biden recently said he was considering putting something on hold.
“Yes, I’m thinking about it,” Biden told reporters on Monday. “I want to make a decision based on the data. I’m looking for this weekend.
The White House has criticized Russia for invading Ukraine, a situation often cited as the main reason for high oil prices. While it certainly didn’t help, the spike in fuel prices started long before a Russian soldier crossed the border.Assuming Biden wins the 2020 election, markets react to proposed environmental policies, forcing Oil prices to rise in November this year. Fuel prices followed, and the Ukrainian invasion only made the market more volatile.
But oil worries have also turned cautious about a supply glut after COVID lockdowns forced demand to such an extent that oil began to fall. The situation has actually gotten so dire that companies are actually paying people who have the option to get rid of excess fuel in 2020 because they have nowhere to store it.
Back in the present, the Biden administration has done something to help normalize pricing. Biden has already pitched some strategic oil supplies in the U.S., and the administration plans to continue meeting with the chief executives of major oil companies to discuss how best to handle the situation.according to New York Times, another meeting is scheduled this week. But nothing seemed to work, with critics arguing that the White House’s environmental policies and unchecked government spending were at the heart of driving up costs.
of New York Times:
The White House and congressional Democrats have been discussing a nationwide gas tax waiver as one of the few options for lowering pump costs, as external factors have been the main driver of price spikes. The high cost of natural gas is becoming a big obstacle for Biden and Democratic lawmakers as the midterm elections loom.
When gasoline prices soared in March, the White House turned to the Strategic Petroleum Reserve, ordering the release of up to 1 million barrels a day over 180 days in an attempt to meet demand. The overall impact will be limited, with gasoline prices still near record highs.
Biden said Monday that his team plans to meet with the chief executives of major oil companies this week. He last week condemned some of the biggest oil companies for profiting as U.S. consumers suffer from high oil prices.
Given the average U.S. car’s gas consumption, it’s hard to see how much of an impact suspending the federal fuel tax would have. The average American drives about 14,000 miles per year and owns a vehicle that averages about 26 miles per gallon. The last number is a bit awkward because the University of Michigan dropped its study of the real average economy of American cars. But it stagnated at a fairly stagnant 25 mpg a few years ago, so we’re guessing it’s increased since then.
Still, that’s only about $99 a year, assuming fuel prices don’t rise for the rest of the year. Based on the increase in the price of a gallon of gas, drivers are unlikely to recover the extra money they already have to invest in their respective tanks. While diesel fuel is higher (24.4 cents per gallon), owners of these vehicles will still find themselves in a similar situation.
Given the unprecedented nature of the times, it’s hard to speculate on what the outcome will be.Your author has recently used video games to unwind and noticed Real fuel prices in California are now well over Cyberpunk 2077 – A 2020 game set in a deliberately absurd dystopian future, focusing on a global energy crisis, corrupt governance, crumbling infrastructure, rampant corporate influence, habitual street violence and unprecedented unequal income Level. The absurdity of the real world is now beyond what fiction can offer, and it doesn’t bode well for any hastily devised scheme to temporarily appease voters. People need a real, permanent solution to the growing problem, and a serious reduction in rising fuel prices seems like a reasonable request.
But here’s the thing: US corporate prices and profits are now at their highest levels since the 1950s. This includes Q1 2022 collective profits for major oil companies (eg ExxonMobil, BP, Shell, Chevron, etc.) to Q1 2021. Meanwhile, the Biden administration has repeatedly said it wants the U.S. to transition to renewable energy. Energy and all-electric vehicles. Neither group appears to really have a vested interest in addressing fuel prices, and there are fears that politics will eventually reflect that.[Update 6/22/2022: Joe Biden formally asked Congress to suspend the fuel tax for three months on Wednesday. “Today I’m calling on Congress to suspend the Federal gas tax for the next 90 days, through the busy summer season, busy travel season,” he told the press, adding that states could also temporarily pause their own fuel taxes.
There has been some light criticisms among Democrats, including Rep. Peter DeFazio, chair of the House Committee on Transportation and Infrastructure.
“Although well-intentioned, this policy would at best achieve only minuscule relief while blowing a $10 billion dollar hole in the Highway Trust Fund that would need to be filled if we want to continue to fix crumbling bridges, address the spike in traffic deaths, and build a modern infrastructure system,” DeFazio said in a statement to CBS News. “Furthermore, encouraging state governments to suspend their gas taxes undermines the impact of the Bipartisan Infrastructure Law by reducing funds available to states to spend on infrastructure improvements.”
Though the Biden administration did get the support of its own cabinet. This included U.S. Secretary of Energy Jennifer Granholm, who suggested to the press that the measure would only be part of a large program to help address rising energy costs. However Republicans have predominantly come out against the plan, even going so far to mock it or recalling Barack Obama calling the scheme a “gimmick” when it was pitched by Hillary Clinton during the 2008 presidential campaign.] [Image: CC7/Shutterstock]
Become a TTAC insider.Get the latest information newFeatures, TTAC sockets and everything first find out the truth about the car Subscribe to our communication.