Lawmakers Eye Lifting Gas Tax To Ease Potential $2/Gallon Price

The AP stated that House and Senate tax writing committees were cool to the idea, but a number of Republican senators said the proposal might gain momentum if prices at the pump, currently at record highs of more than $1.50 a gallon in many places, continue to climb.

"We’ve got to take down the price of gas this summer," said Sen. Ted Stevens, R-Alaska, suggesting one way to help do that was suspending the 1993 excise tax.

But some Republican lawmakers also questioned whether tampering with the federal gas excise tax might be an overreaction, especially if it gets reimposed once gas prices decline.

"I am for tax reduction whenever you can put them on the books. I’m a little concerned when we say we’re going to do it, then we’re going to take it back," said Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee, which considers tax legislation.

And Archer questioned how much good a 4.3 cent difference would make when gasoline – as some predict – hits $2 a gallon during the peak driving period this summer.

Regarding that potential mark, U.S. Energy Secretary Bill Richardson said Wednesday that gasoline pump prices would not reach $2 a gallon. Richardson predicted that rising energy prices will stabilize after the OPEC oil cartel meets on March 27 and presumably raises production levels.

"I believe OPEC will raise production, and diesel and gasoline prices will stabilize after that," Richardson told lawmakers.

Earlier this week, the Department of Energy forecast that gasoline prices could hit a national average of $1.80 a gallon this summer, even if OPEC increased output in the near term.

The DOE’s prediction is based on studies by its statistical unit, the U.S. Energy Information Administration (EIA). EIA is currently projecting U.S. retail gasoline prices will peak at $1.56 per gallon this summer with price volatility resulting in a 20-25 cent per gallon price surge, bringing the average price to $1.80 "for a time," the agency said.