Consumer Fuel Costs Relief Act
- Sponsor
- Sen. Kelly, Mark [D-AZ]
- Committees
- Finance Committee (primary)
- Last action
- Sep 24, 2026
Bottom line
This bill aims to reduce consumer fuel costs by temporarily eliminating federal fuel taxes while attempting to backfill infrastructure trust fund revenues and prevent price gouging by fuel providers.
What it actually does
This bill establishes a temporary tax holiday for federal motor and aviation fuel excise taxes, setting the rate to zero from its enactment until October 1, 2027. To prevent depletion of dedicated infrastructure funds, it mandates transfers from the general fund to the Airport and Airway Trust Fund, the Highway Trust Fund, and the Leaking Underground Storage Tank Trust Fund. The bill also includes provisions aimed at ensuring the tax reduction is passed on to consumers, with enforcement by the Treasury, Federal Trade Commission (FTC), and Commodity Futures Trading Commission (CFTC).
Proponents argue
Proponents argue that this bill will provide immediate and tangible financial relief to consumers and businesses facing high fuel prices, stimulating economic activity by reducing transportation costs for individuals, trucking companies, and the aviation industry. They emphasize the inclusion of general fund transfers to protect vital infrastructure funding, addressing a common criticism of fuel tax holidays.
Opponents contend
Opponents would likely contend that a fuel tax holiday would significantly deplete the federal general fund, potentially exacerbating the national debt or requiring cuts elsewhere, and that the actual benefit to consumers might be minimal if producers and retailers do not fully pass on the savings. Concerns about the long-term fiscal health of the nation, despite the trust fund backfill, would also be raised.
The bill is exceptionally short and clear, allowing for a quick read and ample time to consider its implications.
Section 2(a)
Temporary Zero Tax Rate on Motor and Aviation Fuels
This provision temporarily suspends the federal excise tax on motor and aviation fuels, including the Leaking Underground Storage Tank Trust Fund financing rate. This suspension would be effective from the date the bill is enacted until October 1, 2027. The intent is to lower the price consumers pay at the pump and for air travel by removing the federal tax component.
Supporters argue
Supporters argue that this direct tax cut will immediately lower prices at the pump and for air travel, providing much-needed financial relief to households and businesses struggling with inflation and high energy costs.
Critics contend
Critics might contend that the actual savings passed to consumers could be negligible due to market dynamics, and that the primary beneficiaries might be fuel producers and retailers who could absorb some of the tax cut as increased profits.
Tradeoffs
The tension lies between providing immediate consumer relief and the potential for reduced federal revenue, even with a general fund transfer, which could impact the national debt.
Section 2(b)
General Fund Transfers to Trust Funds
To ensure that vital infrastructure projects are not defunded by the tax holiday, this provision directs the Secretary of the Treasury to transfer amounts from the general fund to the Airport and Airway Trust Fund, the Highway Trust Fund, and the Leaking Underground Storage Tank Trust Fund. These transfers would be equal to the revenue that would have been collected from fuel taxes if the holiday were not in effect, and they are to be treated as if they were tax receipts for accounting purposes.
Section 2(c)
Mandate to Pass Benefits to Consumers and Enforcement
This section establishes a clear policy that the benefits of the tax reduction must be immediately passed on to consumers by transportation motor fuels producers, airline service providers, and other dealers. It explicitly states that entities failing to reduce prices to reflect this reduction will be subject to monetary penalties. The Secretary of the Treasury is tasked with ensuring consumer benefit, while the Federal Trade Commission (FTC) and Commodity Futures Trading Commission (CFTC) are directed to monitor oil, diesel, and gasoline markets to prevent price gouging and market manipulation.