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Americansare feeling the effects of the Middle East crisis, as the United States’ conflict with Iran has driven up gasoline prices and added pressure to household budgets.
President Donald Trump announced, citing Reuters, that he plans to introduce legislation to suspend the gasoline tax and the 24.4‑cent diesel tax for a period of 90 days.
Crude oil climbed to $107 per barrel after the United States and Iran failed to reach a peace agreement on Monday. The Financial Times notes that U.S. inflation rose to 3.8 percent in April, the highest level in three years, a rise attributed to the war with Iran.
Fuel prices have been increasing since the conflict began on 28 February, while Iran has effectively kept the Strait of Hormuz closed—a chokepoint that traditionally carries about 20 percent of the world’s oil.
Reuters reports that, as of Monday, gasoline averaged $4.52 per gallon in the United States, the highest level since 2022, when the average peaked at $5.01, according to the AAA motor club.
“Yeah, I’m going to reduce,” Trump told reporters when asked whether he would suspend the tax. When asked how long the suspension would last, Trump replied, “Till it’s appropriate.”
Senate Majority Leader John Thune was reportedly noncommittal about a gas‑tax freeze, arguing that reopening the Strait of Hormuz is the most effective way to lower fuel prices, while noting that the taxes fund road repairs.
In March, several Democrats, including Senator Mark Kelly of Arizona, proposed suspending the tax— which generates roughly $2.5 billion per month for road funding—until October. Since 2008, more than $275 billion, including $118 billion from the 2021 infrastructure law, has been redirected from the general fund to pay for road repairs.
Trump told CBS earlier that a bailout plan for airlines, which are struggling with rising jet‑fuel costs, had not “really been presented” and that “the airlines are not doing badly.”
Low‑cost carriers have requested a $2.5 billion bailout, and Spirit Airlines halted operations on 2 May, citing high jet‑fuel prices as a barrier to its restructuring plan. Several states—Indiana, Kentucky and Georgia—are also cutting gasoline taxes to provide some relief at the pump.
The U.S. Bureau of Labor Statistics’ consumer price index has risen sharply since the conflict began, moving from 2.4 percent in February to 3.3 percent in March year‑on‑year.
Tuesday’s inflation figure exceeded Wall Street expectations and marked the first time in three years that inflation has outpaced wage growth.
The Financial Times adds that the last time prices rose this quickly was in 2023, when the United States faced an energy shock following Russia’s full‑scale invasion of Ukraine.
This report underscores how the Iran conflict is affecting the world’s largest economy, with higher fuel costs spilling over into other sectors and adding pressure on President Trump, whose popularity is near record lows as the war burdens American households.
Trump said on Monday that a ceasefire with Iran was “on life support” after he rejected Tehran’s response to a U.S. peace proposal, raising concerns of renewed hostilities in the 10‑week‑old conflict that has killed thousands and disrupted vital energy flows around the Strait of Hormuz.
According to Reuters, days after the United States floated a proposal to restart negotiations, Iran released a response on Sunday that called for ending the war on all fronts, including Lebanon, where U.S. ally Israel is fighting Iran‑backed Hezbollah militants. Trump swiftly rejected the response.
When asked about the status of the ceasefire, Trump told reporters on Monday, “I would call it the weakest right now, after reading that piece of garbage they sent us. I didn’t even finish reading it.”
Iran’s response reportedly demanded compensation for war damage, reaffirmed its sovereignty over the Strait of Hormuz, and called on the United States to lift its naval blockade, guarantee no further attacks, end sanctions, and remove a ban on Iranian oil sales.
The United States had proposed ending hostilities before moving to more contentious issues, such as Iran’s nuclear programme.
Defending Iran’s position, Foreign Ministry spokesperson Esmaeil Baghaei said: “Our demand is legitimate: demanding an end to the war, lifting the (US) blockade and piracy, and releasing Iranian assets that have been unjustly frozen in banks due to US pressure; safe passage through the Strait of Hormuz and establishing security in the region and Lebanon were other demands of Iran, which are considered a generous and responsible offer.”
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