I remain convinced that policy has very little chance to impact gasoline prices in anything approaching a meaningful way anytime soon. However I am surprised I am not hearing more about the most obvious solution: a temporary suspension of the federal fuel excise taxes. As of July 1, 2021, according to the Energy Information Administration (EIA), these federal taxes amounted to 18.4 cents per gallon for gasoline and 24.4 cents for diesel.

You can make this a temporary tax cut of say, 3 months? This would be a nod to the various difficult political angles it would represent with an approaching election. That takes it out to June when futures prices start a decline, albeit a gradual one.

Is this a significant amount? Not really. But it can add up over time. If states follow suit and engage in full or partial reductions of state gasoline taxes this could grow in impact. In North Dakota there is an additional 23.03 cents per gallon assessed in taxes and fees. For some sense of scale, North Dakota is the sixth lowest in the US in these state assessments according to data from EIA. Temporarily removing both would be a 41 cents per gallon savings for the consumer.

In 2020 North Dakota consumed more than 8.85 million gallons for transportation. This figure excludes industrial and commercial uses. So if there was a savings of 41 cents per gallon over three months (assuming even consumption over the year) we are talking about a savings of $907,125.

The White House and Congress could also engage in “jawboning” to expand the impacts. Suggest to companies that pass on the cost on increased fuel that there better be some reduction as well. In this way you might actually achieve some minor, and temporary, relief from higher fuel prices for American consumers.

These types of policies will not offset several dollars of increased price per gallon but it can take some of the edge off, particularly if states follow the federal government lead. Why is this not getting attention? I am not sure but suspect that there are political calculations from both sides that emphasize what could go wrong from an election standpoint.