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Published: Apr 28, 2022 6 min read
Hand Pumping Gas With Downward Arrows In Background
Money; Shutterstock

Sky-high gas prices are on everyone's minds these days. As costs keep climbing, states and cities and even chain restaurants and big box stores like Walmart are seizing the opportunity to provide relief at the pump — and curry favor with drivers in the process.

Amid the ongoing conflict in Ukraine and rising inflation, gas is still really, really expensive — and it’s getting worse. The average price of a gallon of regular gasoline in the United States is now $4.14, according to AAA. That’s not quite as bad as the record high of $4.33 in March, but it’s 2 cents higher than last week and $1.25 more expensive a year ago.

There’s been talk among some Democrats of a pause on the national gas tax, but it’s not clear whether any bill will have enough support in Congress to make it to President Biden’s desk. In the meantime, some states and cities are continuing to take matters into their own hands to help ease the pain of high gas prices.

Lower gas prices around the country

The suspension of state gas taxes has been a popular tactic: Nearly a dozen states including Maryland, Florida and Georgia either enacted or proposed gas tax holidays this spring. Lawmakers in Connecticut recently reached a budget deal that includes an extension of the suspension of gas taxes in the state until December, according to the Hartford Courant. Previously, the gas tax cut was set to expire at the end of June. Governor Ned Lamont said the extension will save drivers an estimated $150 million this year, the Courant reported.

New York will soon reduce its own gas tax, though the state won’t suspend the levy entirely. As part of a budget deal announced earlier this month, New York will cut gas taxes by 16 cents — or roughly 50% — from the beginning of June through the end of the year, Syracuse.com reported.

Other places are giving out the equivalent of cash to help lower drivers' gas station bills. Chicago recently approved a plan to give residents free gas and public transit cards. The gas cards are worth $150 each and will be distributed monthly to eligible residents via a lottery system. Other states including Delaware, Idaho and New Mexico are also offering cash or tax credits to drivers to offset high gas prices.

It’s not just state and local governments. In an attempt to woo seasonal workers this summer, one resort in Oregon is offering $100 monthly gift cards for gas to employees between May and August, according to local outlet KTVZ.

Retailers are also getting in on the action with discounted or free gas card offers. The fast food chain Bojangles began a promotion earlier this month that gave away free $10 gas cards with meal purchases, and Walmart announced Wednesday that members of its Walmart+ service will receive an additional discount of up to 10 cents per gallon at certain gas stations.

Some Americans won’t see gas tax relief

In some states, politics and budgetary concerns have prevented gas tax pauses from becoming law. After all, not every expert and politician agrees that sending free cash or suspending taxes at the pump is the best way to help American consumers avoid high prices.

A recent analysis from the Urban Institute argues that pausing gas taxes “could do more harm than good” in the long run. That’s partially because state gas taxes account for a very small fraction of the total price consumers pay for fuel (if consumers see any savings at all), and pausing the taxes disrupts vital funding states can use for infrastructure improvements.

The Tax Policy Center has reported that cutting gas taxes is also likely to increase demand for fuel and make inflation even worse.

In California, where a gallon of regular gas costs an average of $5.69 (the highest price in the country), lawmakers have so far been unable to reach an agreement on pausing a scheduled gas tax hike. As a result, the state’s gas tax will likely jump a few pennies higher above its current rate of 51 cents per gallon, according to the Sacramento Bee. And in Virginia, a bill establishing a temporary gas tax holiday just failed in the state’s legislature, according to the Richmond Times-Dispatch.

There are still ways to save money on gas even if your state or city isn’t offering meaningful relief. Consumers can often save by paying with cash rather than a credit card, joining a gas rewards program or using an app to find the best prices, and adjusting their driving habits to optimize their fuel consumption.

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