Maryland, Georgia pause gas taxes with prices near record highs

FOX Business Flash top headlines for March 21

Here are your FOX Business Flash top headlines for March 21.

U.S. gas prices dropped by a penny overnight with the average cost of a gallon of gasoline now standing at $4.242 as lawmakers around the country attempt to ease the pain at the pump.

The previous high was set on March 11 when a gallon of gasoline in the United States sold for an average of $4.33.

Lawmakers across the U.S. are pushing to pause the collection of gasoline taxes to give drivers a temporary break at the pump as fuel costs hover near record highs.

HOW HIGH WILL GAS PRICES GO? EXPERTS WEIGH IN

Maryland and Georgia are temporarily cutting state gasoline taxes as fuel prices have surged world-wide amid Russia's invasion of Ukraine, which sent shock waves throughout the oil market. California is considering giving drivers a $400 rebate to help cushion the blow of high gasoline prices.

Lawmakers in Illinois, Massachusetts, Maine, Michigan, Minnesota, New York and Tennessee are also weighing whether to suspend their state taxes on gasoline.

U.S. gas prices dropped by a penny overnight with the average cost of a gallon of gasoline now standing at $4.242 as lawmakers around the country attempt to ease the pain at the pump.  (Ben Hasty/MediaNews Group/Reading Eagle / Getty Images)

And at the federal level, some members of Congress are calling on the Biden administration to suspend federal taxes on fuel.

Maryland Gov. Larry Hogan, a Republican, signed emergency legislation Friday that suspends the state's 36.1-cent-per-gallon tax on gasoline for 30 days. It also pauses the state's 36.85-cent-per-gallon tax for diesel fuel.

"This bipartisan action will provide some relief from the pain at the pump," Hogan said Friday. "This is, of course, not a cure-all, and market instability will continue to lead to fluctuations in prices, but we will continue to use every tool at our disposal to provide relief for Marylanders."

AMERICANS CAN EXPECT TO PENNY PINCH WITH DIESEL SURPASSING '08 PRICES

Georgia Gov. Brian Kemp, a Republican, also signed legislation Friday suspending the state's 29.1-cent-per-gallon tax on gasoline and the 32.6-cent-per-gallon tax on diesel fuel through the end of May.

The suspension of the gasoline taxes will "ease the burden consumers are feeling at the pump," Kemp said in a video statement posted to Twitter. "We are doing our part to lessen the impact on your wallet."

Critics of a suspension say oil companies might further raise the price of fuel if the federal tax is paused. Others point out that the gasoline tax only makes up a small part of the overall cost of gasoline. (iStock / iStock)

Critics of a suspension say oil companies might further raise the price of fuel if the federal tax is paused. Others point out that the gasoline tax only makes up a small part of the overall cost of gasoline.

"The savings are going to be so minimal for everyday Americans," said Lucy Dadayan, a senior research associate at the Urban Institute, a think tank based in Washington.

Dadayan said rebates for low-income households would provide a more targeted approach that would help those who need it most.

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Gas prices were inching up at the beginning of the year but hit record highs after Russia invaded Ukraine. The average national price of a gallon of unleaded gasoline peaked at $4.33 on March 11, according to AAA. The average price has fallen to $4.25, which is still a 48% increase over a year ago.

Suspending gasoline taxes at the state level also means officials would have less money at their disposal to spend on road and highway maintenance unless it is offset in some way. State officials that back gas-tax suspensions say this is one of the few tools they can use to give drivers some relief.

State lawmakers in Florida approved a measure earlier this month that suspends the state's 25-cent-per-gallon tax of gasoline for the entire month of October, which comes after the end of the state's busiest tourist season.

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Connecticut Gov. Ned Lamont, a Democrat, and legislative leaders have also reached an agreement to pause state collections on gasoline taxes through the end of June.

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