Britain's hard-pressed motorists will be hoping the UK Government follows the example of what could happen across the Atlantic on fuel tax.

US President Joe Biden has just called for a three-month suspension of America's national gasoline tax in response to the country's soaring energy prices.

The average cost of a gallon of gas, or petrol, is hovering near £4, up from £2.45 a year ago.

British drivers would be delighted if our fuel prices were anywhere near the American level, as a gallon of petrol here is currently around £8.59.

There have been efforts in Britain to ease the pain motorists are feeling at the pumps. In March, the Chancellor Rishi Sunak announced a historic 5p-a-litre cut in fuel duty.

But RAC fuel spokesman Simon Williams said: "With drivers facing such a dire situation on the forecourts, we badly need further intervention from the Chancellor as households and businesses surely can't take much more financial pain in conjunction with the horrendous hikes in gas and electricity.

Something needs to be done

"Something needs to be done - whether that's a further cut in duty from the current 53p charged on every litre bought at the pumps, or a reduction in VAT from 20%.

"Arguably, a duty cut would make a bigger difference to both businesses and individuals, but it also seems very unfair that the Treasury is benefiting to the tune of 30p a litre in VAT revenue from the record high prices - as it's effectively a tax on a tax, applied on top of the wholesale fuel cost, duty, delivery and retailer margin.

"A VAT cut would be instant and wouldn't be swallowed up by fluctuations on the wholesale market."

The BBC says that, with national elections for Congress coming in November, Mr Biden is under pressure to respond to rising fuel costs.

Analysts say that removing the levy would have a limited impact on household petrol and diesel costs.

Political support for the gas tax holiday, which would require an act of Congress, is also uncertain.

Biden plan dismissed as a gimmick

A top Republican senator on Wednesday dismissed it as a "gimmick," saying that the proposal is "dead on arrival", while members of Mr Biden's own party have voiced concerns that the move would primarily benefit oil-and-gas firms.

Mr Biden said policymakers should do what is in their power to try to ease the strain on families, calling on companies to pass on "every penny" in savings to the public.

"I fully understand that a gas tax holiday alone is not going to fix the problem," he said. "But it will provide families some immediate relief, just a little bit of breathing room as we continue working to bring down prices for the long haul".

Currently, the US imposes a tax of roughly 15p per gallon on gasoline and 19p on diesel, using the money collected to help pay for highway infrastructure.

Eliminating the levy through to September, as Mr Biden has proposed, would cost the government an estimated £8billion.

The move is the latest effort from countries around the world to address the soaring energy costs.

Surge in oil prices

Oil prices have surged since last year, as demand outstrips supplies constrained by cuts that many firms made after the pandemic hit in 2020 and prompted demand to crater.

As the war in Ukraine pushes Western countries to shun oil from Russia - a major energy producer - that has also contributed to the crunch.

The American Fuel and Petrochemical Manufacturers industry group said a gas tax holiday would provide "near-term relief but it won't solve the root of the issue - the imbalance in supply and demand for petroleum products".

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