Gas Prices Relief Act of 2026
- Sponsor
- Rep. Pappas, Chris [D-NH-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Mar 12, 2026
Bottom line
The bill aims to provide temporary relief from high gasoline prices by eliminating federal fuel taxes, while using general treasury funds to backfill infrastructure and environmental trust funds, with a mandate for savings to reach consumers.
What it actually does
This bill temporarily suspends the federal excise tax on gasoline and the Leaking Underground Storage Tank (LUST) Trust Fund financing rate from its enactment date until October 1, 2026. It mandates that the Treasury transfer funds from the general fund to the Highway Trust Fund and the LUST Trust Fund to cover the lost revenue. Additionally, it establishes a policy that the tax reduction should be passed on to consumers, with the Secretary of the Treasury tasked with enforcement.
Proponents argue
Proponents argue that this bill offers immediate and tangible financial relief to consumers struggling with high gasoline prices, thereby boosting household disposable income and stimulating economic activity. They emphasize that the critical Highway Trust Fund and LUST Trust Fund are protected through general fund transfers, ensuring that vital infrastructure projects and environmental cleanup efforts are not jeopardized by the tax holiday.
Opponents contend
Opponents contend that the benefits of a gasoline tax holiday often do not fully reach consumers, with fuel companies potentially absorbing a significant portion of the savings as increased profits. They also argue that backfilling trust funds from the general treasury effectively shifts the cost to all taxpayers and contributes to the national debt, rather than providing a genuine tax cut, and could encourage increased fossil fuel consumption.
The bill text is exceptionally short and clear, allowing for a quick and comprehensive understanding of its provisions.
Section 2(a)
Temporary Suspension of Federal Gasoline and LUST Taxes
This provision sets the federal excise tax rate on gasoline to zero and suspends the Leaking Underground Storage Tank (LUST) Trust Fund financing rate for gasoline removed, entered, or sold from the date of enactment until October 1, 2026. This means that for approximately six and a half months, consumers would not pay the federal portion of the gasoline tax, which currently stands at 18.4 cents per gallon for gasoline and an additional 0.1 cents per gallon for the LUST fund.
Supporters argue
Supporters argue this provision directly lowers the cost of fuel for everyday Americans, providing immediate financial relief and potentially boosting economic activity by increasing household disposable income.
Critics contend
Critics contend that the benefit to consumers may be minimal if producers and retailers do not fully pass on the tax savings, instead absorbing the difference as increased profits, thereby undermining the bill's primary objective.
Tradeoffs
The primary tension is between providing immediate consumer relief and the risk that the savings may not fully reach consumers, alongside the fiscal implications of foregoing dedicated tax revenue.
Section 2(b)
General Fund Transfers to Highway and LUST Trust Funds
This provision directs the Secretary of the Treasury to transfer amounts from the general fund of the Treasury to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund. These transfers are designed to replace the revenue that would otherwise be collected from the federal gasoline tax and the LUST financing rate during the tax holiday period, ensuring that these dedicated trust funds maintain their solvency and funding levels for infrastructure and environmental programs.
Section 2(c)
Policy on Passing Tax Reduction to Consumers and Enforcement
This section establishes a Congressional policy that consumers should immediately receive the full benefit of the tax reduction. It explicitly states that transportation motor fuels producers and dealers should reduce prices to reflect this reduction, and that those who fail to do so should face monetary penalties. The Secretary of the Treasury is mandated to use all applicable authorities to ensure that these benefits are indeed passed on to consumers.