Yellen: Consider temporary fuel tax cut

US Treasury Secretary Janet Yellen believes that it is worth considering a temporary elimination or partial reduction of the motor fuel tax as a way to address inflation, although it is not a perfect model because it may not lead to all of the cuts being passed on to consumers.

Addressing reporters after meetings with Canadian Finance Minister Chrystia Freeland in Toronto, Yellen said that research suggests consumers would benefit more from a reduction in higher state fuel taxes than from the generally lower federal taxes of 18.4 cents per gallon for gasoline and 24.4 cents for diesel, Reuters reports.

I think research suggests that there is a significantly greater impact for consumers when a single state does it with pump prices. At the federal level, we have lower, much lower taxes than at the state level, and the data is mixed, she stated, adding that fuel prices are a significant burden for American households.

A fuel tax holiday that temporarily eliminates those levies, while not perfect, is something that should be considered to combat inflation, Yellen said.

The US Secretary dismissed the idea of reviving the Keystone XL pipeline project between Canada and the US as a way to temporarily ease the upward pressure on oil prices caused by the Russian attack on Ukraine.

On his first day in office, US President Joe Biden revoked the permit for the completion of the Keystone XL pipeline, which would have transported modified bitumen from Canadian oil sands to refineries in the US Midwest and the Gulf Coast, assessing that it would lock the US into decades-long use of carbon-intensive fossil fuels.

SOURCE: RTV PHOTO: RTV