DAYTON, Ohio (WDTN) — President Joe Biden said he’s considering a federal holiday on the gasoline tax, possibly saving U.S. consumers money at the pump. Local economics experts say in the short term, it’s a good decision but in the long run, it may have lasting effects on our economy.
If gas prices are lowered, the demand will increase, but Cedarville University Professor Dr. Marc Clauson is concerned that our current gasoline supply can’t meet those demands.
“For the consumer in the short run it’s a good thing, consumers want something done, from a political standpoint it’s a pretty good move on the Biden administration,” said Dr. Clauson. “But in the longer run, it could present some problems.”
A federal gasoline tax holiday is on President Biden’s agenda this week and if passed, consumers could see relief on the Fourth of July weekend. The proposed tax holiday would save drivers as much as 18.4 cents per gallon of gas. The current gasoline tax funds highway projects. If the tax is cut for a long period of time, Dr. Clauson said it could start a ripple effect in the U.S. economy.
“You can put that off but you can only put that off for so long,” said Dr. Clauson.
The Biden administration has already reopened several U.S. reserves and increased ethanol blending for the summer, but more long-term measures need to be taken.
“We need in the long run to begin thinking about how to allow more drilling in a more environmentally friendly way, we’ve done it before and we’ll do it again but it’ll take political will,” said Dr. Clauson.
Overall, he Clauson said the war between Russia and Ukraine needs to end and is hopeful that Russia will sell gasoline to U.S. consumers once again.
“If Russia really felt like they were becoming a destitute or poor country, they’re already poor but really poor, they may sell us oil again. If you’re really desperate you’ll do a lot of things,” said Dr. Clauson.
Biden said he’s hoping to make a decision by the end of this week.