A bill to amend the Internal Revenue Code of 1986 to provide a gasoline tax holiday.

The 'Gas Prices Relief Act of 2026' (S.4032), introduced by Senator Kelly (D-AZ) and cosponsored by Senator Blumenthal, proposes to amend the Internal Revenue Code of 1986 to provide a federal gasoline tax holiday until October 1, 2026. The bill was read twice and referred to the Senate Committee on Finance on March 9, 2026. This indicates the bill is in its initial legislative phase, requiring committee consideration and potential floor votes in both chambers before it could become law. A related bill, HR3768, is also in committee in the House. The bill's mechanism involves setting the federal gasoline tax rate to zero and eliminating the Leaking Underground Storage Tank Trust Fund financing rate for gasoline from the date of enactment until October 1, 2026. To offset the revenue loss to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund, the Secretary of the Treasury would transfer equivalent amounts from the general fund. The bill explicitly states that it is Congressional policy for consumers to immediately receive the benefit of this tax reduction, and transportation motor fuels producers and dealers should reduce prices accordingly, with potential monetary penalties for non-compliance. This is not an appropriation bill; it is a tax policy change that would redirect existing tax revenue streams. Structural winners, if the bill passes and the tax reduction is passed to consumers, would be the general consumer base due to lower fuel costs, potentially increasing disposable income. This could indirectly boost demand for gasoline. Companies involved in gasoline production and refining, such as Exxon Mobil Corporation ($XOM), Chevron Corporation ($CVX), Marathon Petroleum Corporation ($MPC), Phillips 66 ($PSX), and Valero Energy Corporation ($VLO), could see increased demand, but their direct profitability would depend on whether the tax savings are fully passed to consumers or if they can capture some of the benefit. The bill's language emphasizes passing savings to consumers, suggesting direct profit capture by producers is not the intent. Recent market data for major energy companies shows varied performance. Over the past 30 days, $XOM is up +8.36%, $CVX is up +4.72%, $MPC is up +11.06%, $PSX is up +6.54%, and $VLO is up +7.7%. However, over the past 7 days, all these stocks have experienced declines: $XOM is down -4.72%, $CVX is down -5.62%, $MPC is down -1.53%, $PSX is down -4.05%, and $VLO is down -1.87%. This recent downward trend suggests that the market is not currently pricing in a significant positive impact from this specific legislative proposal, or other market factors are dominating. The bill's early stage and uncertain passage contribute to this. For the bill to become law, it must pass the Senate Committee on Finance, then the full Senate, then the House of Representatives, and finally be signed by the President. Given its early stage and the presence of only one cosponsor, the legislative path ahead is substantial and uncertain. The proposed holiday is temporary, ending October 1, 2026, which limits its long-term market impact.