WASHINGTON — Georgia last month became the first state to suspend its motor fuel tax as rising fuel prices strained household budgets across the country. Republican Gov. Brian Kemp signed a 60-day suspension of the state's 33-cent-per-gallon gas tax and 37-cent-per-gallon diesel tax.

A small number of other states have followed with their own measures. On April 8, Republican Gov. Mike Braun issued an executive order for a 30-day suspension of Indiana's 7% gasoline sales tax. Utah temporarily reduced its state fuel tax by 6 cents per gallon, bringing its state gas tax to 32 cents per gallon for the remainder of 2026. Most states, however, have been hesitant to suspend their gas taxes.

The war with Iran has driven up fuel prices, and the average gas price in the U.S. on Wednesday was $4.11 per gallon, according to AAA. A recent poll by CBS News found that 51% of respondents said gas prices have posed a financial hardship or been financially difficult for them. The average state gas tax is 32.6 cents per gallon, according to the U.S. Energy Information Administration.

But analysts have questioned whether suspending fuel taxes delivers savings directly to consumers. "The bottom line is it's an expensive gimmick," Carl Davis, research director at the Institute on Taxation and Economic Policy, said. "If the goal is to get tax cuts into the hands of working-class, middle-class drivers, it's mostly going to miss the mark."

Davis explained that gas taxes do not function like a sales tax and that suspending them will not directly pass all of the savings to consumers. "Some of it will be retained along the way by the oil and fuel industries," he said. A 2022 Penn Wharton study found that drivers in earlier temporary fuel tax cuts received only a portion of the savings — 62% in Georgia, 72% in Maryland, and 71% in Connecticut. The remainder was presumed to be absorbed by fuel wholesalers or distributors, who can choose to keep some of the money instead of lowering prices at the pump.

Gas and diesel taxes function as a user fee for roadways. Without the revenue, road improvement projects could be placed on hold or delayed. The Institute on Taxation and Economic Policy estimates Georgia will lose about $399 million in revenue over the 60-day suspension, while the bottom 60% of earners in the state will save only $13 a month. Davis added that potholes may go unfilled and drivers may need unplanned mechanic shop visits to fix tires. "That's not something drivers should be excited about," he said.

Adam Hoffer, director of excise tax policy at the Tax Foundation, said many states are already drawing upon other revenue sources to fund road projects and cannot afford to eliminate the gas tax. He noted that reinstated taxes could come at a poor time for drivers. "The really heavy summer travel season is ahead of us," Hoffer said.

The federal government has not moved to suspend the federal 18.4-cent-per-gallon gas tax or 24.3-cent-per-gallon diesel tax, which would require an act of Congress. Federal gas tax revenue goes directly into the federal Highway Trust Fund, which is gradually becoming underfunded, according to Hoffer. "I think that's the reason why we're not seeing a federal proposal at this time," he said. The U.S. Energy Information Administration now projects gas prices will average $3.46 per gallon in 2027, up from its January pre-war estimate of $2.95 per gallon.