Commodities May 11, 2026 11:36 AM

Trump Proposes Temporary Pause on Federal Gas Tax, Declines Airline Relief

President backs suspending the 18-cent federal gasoline tax while saying airlines have not made a strong case for a bailout amid rising fuel costs tied to the Iran conflict

By Priya Menon

President Donald Trump said he favors pausing the 18 cent federal gasoline tax for a limited time and allowing it to be phased back in once pump prices fall. He also said a bailout for airlines had not been formally presented and that carriers were "doing not badly", even as U.S. gasoline prices remain elevated following the start of the Iran war.

Trump Proposes Temporary Pause on Federal Gas Tax, Declines Airline Relief

Key Points

  • President Donald Trump said he wants to suspend the 18 cent federal gas tax temporarily and phase it back in when prices fall - impacts consumers at the pump and state fuel tax policy dynamics.
  • Trump said a bailout for airlines had not "really been presented" and that carriers were "doing not badly," indicating federal relief for airlines is not currently being pursued - impacts the airline sector and jet fuel demand assumptions.
  • States remain active in addressing pump prices: Indiana, Kentucky and Georgia have moved to reduce state gasoline taxes to give consumers relief - impacts state revenues and local gasoline markets.

WASHINGTON, May 11 - President Donald Trump said on Monday he wants the 18 cent federal gas tax suspended for a period, while rejecting the need for targeted federal relief for airlines facing higher jet fuel costs, CBS News reported.

Speaking to CBS, the president set out a short, specific approach to the federal gasoline levy: "We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in," he said.

On the question of assistance for the airline industry, Trump told CBS that a bailout plan had not "really been presented" and added that "the airlines are doing not badly." The president therefore dismissed the idea of immediate federal aid for carriers confronting higher jet fuel expenses.

Separately, the administration signalled some openness to the suspension of the federal gas tax. On Sunday, Energy Secretary Chris Wright told NBC News’ "Meet the Press" program that the Trump administration was open to suspending the federal gas tax.

State governments have also taken action to relieve pressure at the pump. U.S. states levy their own gasoline taxes, and Indiana, Kentucky and Georgia have moved to cut state-level gasoline taxes in an effort to ease consumer costs.

U.S. pump prices have increased since the Iran war began on Feb. 28. According to AAA, the national average price for one gallon of gasoline stood at $4.52 as of Monday.


Context and implications

The president’s remarks highlight a federal-level policy option - temporarily suspending the 18 cent per gallon federal gasoline tax - aimed at delivering short-term relief to motorists. At the same time, his comments signal reluctance to adopt direct federal financial support for airlines, absent a formal bailout proposal.

State-level tax cuts in Indiana, Kentucky and Georgia reflect localized policy responses to rising fuel costs.


Sources cited in reporting

  • CBS News - report of the president's statements.
  • NBC News’ "Meet the Press" - Energy Secretary Chris Wright's comments on possible suspension of the federal gas tax.
  • AAA - national average gasoline price of $4.52 per gallon as of Monday.

Risks

  • Elevated U.S. gasoline prices have followed the start of the Iran war on Feb. 28, creating continued pressure on consumers and transport-dependent sectors such as logistics and passenger airlines.
  • Uncertainty around federal support for airlines - since no formal bailout plan has been presented - could leave carriers exposed to sustained higher jet fuel costs, affecting their operating margins and capacity decisions.
  • Variable policy responses across states (example: tax cuts in Indiana, Kentucky and Georgia) create uneven relief for consumers and differing impacts on state fiscal positions and regional fuel markets.

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