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Congress and states scramble to blunt impact of rising gas prices

With gas prices remaining at near-record highs amid rampant inflation and Russia’s invasion of Ukraine, some states and members of Congress are proposing creative ways to soften the impact of spiking fuel costs on customers.

Gas prices nationally sat at $4.24 on Friday, although in some states, such as California and Nevada, the average price per gallon had climbed above $5, according to AAA.

California Gov. Gavin Newsom this week floated the prospect of giving all car owners in the state a $400 debit card to blunt the cost of gas.


Under the proposal, the debit cards would be distributed based on registered vehicles, with individual drivers eligible for up to two cards if they own two vehicles.

Newsom’s proposed rebate program, which would require approval by state lawmakers, would cost $9 billion. He has also proposed $2 billion in other relief measures related to high gas prices — including grants to city transit authorities so Californians can get free rides on public transit for three months.

Virginia Gov. Glenn Youngkin has pushed to suspend his state’s gas tax temporarily to relieve some pressure on consumers.

Last week, the Republican governor proposed emergency legislation that would lift Virginia’s gas tax for three months as residents grapple with the higher prices at the pump.

That could reportedly save drivers roughly $0.26 per gallon. As of Friday, the average price per gallon in Virginia was $4.12, according to AAA. Youngkin has urged lawmakers to pass the gas tax suspension in a special session of the Legislature, for which a date has not yet been set.

Maryland this week became one of the first states to pause its gas tax in response to rising prices.

Republican Gov. Larry Hogan signed into law Wednesday a 30-day moratorium on Maryland’s gas tax, which costs customers $0.36 per gallon.

Georgia implemented a gas tax holiday last week, suspending a tax that costs Georgia drivers $0.29 per gallon. The gas tax suspension will last through the end of May.

And Connecticut Gov. Ned Lamont signed into law this week a suspension of the state’s $0.25 per gallon gas tax as well. Connecticut’s gas tax holiday is set to run through the end of June.

On Capitol Hill, a handful of Democrats are considering relief measures at the federal level.

Democratic Reps. Mike Thompson, John Larson, and Lauren Underwood introduced legislation last week that would send people $100 checks for each month that the average price of gas remained above $4 a gallon.

Individuals could receive $100 per dependent from their proposed rebate program as well.


A separate proposal from Democratic Rep. Peter DeFazio would fund a tax rebate program by slapping hefty taxes on oil and gas companies.

Under the Stop Gas Price Gouging Tax and Rebate Act, oil and gas companies would be forced to pay a “one-time, 50 percent windfall profit tax” on income they bring in this year that exceeds 110% of their average income in the years before the pandemic.

The Biden administration and its allies have misleadingly blamed high gas prices in part on price-gouging from oil and gas companies despite there being little evidence of any malign activity from the energy industry.