S. 4032: Gas Prices Relief Act of 2026

This bill, known as the Gas Prices Relief Act of 2026, proposes a temporary suspension of federal gasoline taxes. Here’s a breakdown of what the bill would do:

Tax Suspension

The bill aims to eliminate the federal gasoline tax, meaning the tax rate under the Internal Revenue Code that currently applies to gasoline sales would be set to zero from the time the bill is enacted until October 1, 2026. This includes:

• The general federal excise tax on gasoline.
• The additional tax that funds the Leaking Underground Storage Tank Trust Fund would also not apply during this period.

Funding Compensation

Even though the federal gasoline tax would be temporarily removed, the bill requires the U.S. Department of the Treasury to compensate for the lost revenue. This would involve transferring funds from the general fund to the following trust funds:

• The Highway Trust Fund, which is used for highway construction and maintenance.
• The Leaking Underground Storage Tank Trust Fund, which addresses environmental issues related to leaking underground storage tanks.

Consumer Benefits

The bill emphasizes that consumers should benefit from the tax reduction immediately. It states the following policies:

• Gasoline prices should decrease as a direct result of the tax holiday.
• Gasoline producers and dealers are expected to reduce their prices accordingly.
• If these companies do not pass on the tax savings to consumers, they could face penalties that amount to the tax reduction they failed to provide.

Enforcement Authority

The Secretary of the Treasury is granted authority to use various mechanisms to ensure that the benefits of the tax reduction reach consumers effectively.

Implementation Timeline

The proposed changes would take effect as soon as the bill is enacted and continue until September 30, 2026. This means that consumers could see a reduction in fuel prices for an extended period.

Summary of Key Sections

• Establishment of a gasoline tax holiday until October 1, 2026.
• Compensation for the lost tax revenue to essential federal funds.
• An obligation for gasoline producers and sellers to reduce prices in accordance with the tax reductions.
• Potential penalties for non-compliance in passing savings to consumers.

Relevant Companies

• XOM (Exxon Mobil Corporation) - As a major oil and gas company, Exxon could see impacts related to reduced gasoline prices affecting their revenue and market strategies.
• CVX (Chevron Corporation) - Similar to Exxon, Chevron might be impacted through its gasoline sales if prices decrease due to the tax holiday.
• PSX (Phillips 66) - As a refining and marketing company, Phillips 66 could face price adjustments in its fuel products as a result of this legislation.