Biden to ask US Congress to suspend gasoline taxes

Biden to ask US Congress to suspend gasoline taxes

Photo: The White House via Flickr

US President Joe Biden (pictured right) is expected to ask the US Congress on Wednesday to move forward with a proposal to temporarily suspend fuel taxes for 90 days. The maneuver, which would remove taxes on gasoline and diesel consumed in the country, could ease prices at pumps, which are also at an all-time high.

For the first time, the country saw average gasoline pass $5 a gallon last week. (when converting to the metric system, the price per liter would be BRL 6.82 at the current exchange rate). This week, prices dropped to US$ 4.95 (R$6.76 per liter).

The high price is a result of Russia’s invasion of Ukraine earlier this year, which has pushed the price up $2 a gallon since February. The increase helped to put pressure on the country’s inflation, which reached its highest annual level in 40 years.

Currently, the rate is 18.8 cents (R$ 0.98) per gallon of gasoline, and 24.4 cents (R$ 1.26) in a gallon of diesel. The Biden administration’s expectation is that the suspension plan will cost about US$ 10 billion (R$ 51.6 billion), but could reduce the price of a gallon of fuel by US$ 1 (R$ 5.16).

The expectation of Biden’s announcement caused the price of oil to fall. Contracts for Brent, the main price of the commodity, registered a drop of more than 5%, at US$ 108.

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