Alliance for Automotive Innovation CEO John Bozzella, whose group represents automakers such as General Motors, Toyota, Volkswagen, Hyundai and other leading car manufacturers, put forward a proposal that urged the federal government to address the growing shortfall in the Highway Trust Fund with a vehicle fee.

The proposal would function like a vehicle registration fee that’s assessed on all vehicles based on their weight, and was first reported by Reuters. It comes as the federal government’s current surface transportation law is set to expire on September 30, which could prompt debate over policy changes.

“This policy would guarantee every vehicle on the road contributes something to maintaining America’s transportation network,” Bozzella said. “Those driving older, less fuel-efficient vehicles or who travel long distances bear the financial burden. That’s not fair.”

The proposal would function like a vehicle registration fee that’s assessed on all vehicles based on their weight. Getty Images

The Highway Trust Fund, which finances the federal government’s surface transportation programs involving highways and mass transit, is projected to reach insolvency in 2028, at which time it would face a 46% spending cut, according to the nonpartisan Committee for a Responsible Federal Budget.

Revenue from the 18.4-cents per gallon gasoline tax has declined 60% in real terms, as the federal gas tax hasn’t been increased since 1993 and wasn’t indexed to inflation.

The shortfall has caused Congress and successive administrations to shift more than $275 billion from the federal government’s general fund to help pay for road repairs since 2008, as spending has consistently outstripped revenue.

The Highway Trust Fund, which finances the federal government’s surface transportation programs involving highways and mass transit, is projected to reach insolvency in 2028. Getty Images

Gas tax revenue has also declined amid the emergence of electric vehicles (EVs) and more fuel-efficient hybrids that reduce the frequency of fill-ups by drivers.

A proposal by House Republicans last year would have imposed a new $250 annual fee on EVs and $100 for hybrid EVs, though it wasn’t included in the One Big Beautiful Bill Act.

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Last year, an EV advocacy group known as the Electrification Coalition argued that the proposed $250 fee on EVs was unfair because an average gas-powered vehicle pays just $88 a year in federal gas taxes.

Reuters contributed to this report.

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The national average price for regular gas dropped to $2.998 a gallon, down from $3.001 the previous day, according to the fuel price tracker.

It was also down from $3.036 a month ago and $3.05 this time last year.

US gas prices fell below $3 on Tuesday for the first time since May 2021, according to AAA. Getty Images

Low prices at the pump come as Americans have been beaten down by sticky inflation and a weak labor market. 

A survey from the Conference Board last week found consumer confidence plunged to 88.7 in November – down from 95.5 in October. That’s the lowest level since April.

Many voters in last month’s elections cited the cost-of-living crisis as their top concern as they elected Dems to office — socialist Mayor-elect Zohran Mamdani in New York City, along with gubernatorial winners Mikie Sherill in New Jersey and and Abigail Spanberger in Virginia.

Recent weeks have seen President Trump tout his affordability agenda as Americans shell out more on everything from a cup of joe to plush sofas and kids’ toys.

State gas price averages:

But on Tuesday, the average price of gas dipped below $2.75 a gallon in 18 states including New Mexico, South Carolina, Wisconsin, Iowa and Colorado, according to AAA.

Gas prices dropped alongside oil costs as the Organization of the Petroleum Exporting Countries, or OPEC, ramped up its production of oil – keeping supply higher than demand and sending a barrel of crude down to just $59 as of Tuesday.

The average price of gas is below $2.75 a gallon in 18 states, according to AAA. AP

Some Wall Street giants are betting prices will stay low. 

JPMorgan Chase analysts recently predicted Brent crude oil, the international benchmark, will drop into the low $50-per-barrel range by the fourth quarter of next year and down into the $40 range by the end of 2026.

The “outlook worsens” in 2027 as a mounting supply surplus will sink Brent to just $42 a barrel and down to the $30 range by the end of the year, the analysts wrote.

It’s a sharp turnaround from early December 2022, when US oil prices were roughly $81 a barrel. 

In June, just a few months after Russia invaded Ukraine, gas prices surged to their highest national recorded average price of $5.016 a gallon, according to AAA.

Trump campaigned on delivering lower gas prices to Americans during his second term with a “drill, baby, drill” mindset prioritizing deregulation. 

He also called for OPEC to ramp up oil production during a speech shortly after he was elected.

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The earnings snapshot from the largest US oil producer is closely watched for clues on how the broader oil sector will fare when companies begin releasing quarterly results in a few weeks.

Benchmark Brent crude prices averaged $66.71 per barrel during the April to June quarter, an 11% decline from the previous quarter, as more crude supply from the OPEC+ group of producers weighed on prices. US natural gas prices declined 9% from the first quarter.

Benchmark Brent crude prices averaged $66.71 per barrel during the April to June quarter, an 11% decline from the previous quarter. Exxon Mobil will release second quarter earnings on Aug. 1. Getty Images

Exxon said in the regulatory filing that it will release the final quarterly results on Aug. 1.

Wall Street expects Exxon to report adjusted earnings of $1.53 per share for the second quarter, according to estimates compiled by LSEG.

The company had posted $6.8 billion in upstream earnings for the first quarter. Its total profit in that quarter was $7.71 billion.

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Owners of electric cars in Vermont recently got a letter from the Department of Motor Vehicles with some bad news. Starting Jan. 1 they would have to pay $178 a year to register their cars, twice as much as owners of vehicles with internal combustion engines.

In imposing the higher fee, Vermont became the latest state to make people pay a premium for driving electric. At least 39 states charge such annual fees, including $50 in Hawaii and $200 in Texas, according to the National Conference of State Legislatures. That’s up from no states a few years ago.

Now, as President Trump rolls back Biden administration measures to promote electric vehicles, Republicans in Congress are considering imposing a national fee to bolster the fund used to finance roads and bridges, a fund that is in dire shape.

The fees are an attempt to make up for declining revenue from gasoline taxes that electric cars, for obvious reasons, don’t pay. They’re an example of how governments are struggling to adjust to technological upheaval in the auto industry.

Environmentalists and consumer groups agree that electric vehicle owners should help pay for road maintenance and construction. But they worry that Republicans, who control Congress, would set the fee at extremely high levels to punish electric vehicle owners, who tend to be liberals.

That has already happened in Texas and other states, said Chris Harto, a senior policy analyst at Consumer Reports who focuses on transportation and energy.

“E.V. owners should contribute to paying for the roads that they use,” he said. But, he added, “in some cases, states are implementing fees that are pretty punitive to E.V. drivers, significantly more than what the owner of a gas vehicle would pay.”

Flat fees are also unfair to low-income drivers or people who don’t drive very much, making it even harder for them to buy cars that pollute less, Mr. Harto and others said. Federal and state gasoline and diesel taxes are levied per gallon, so that people who drive more — or own gas guzzlers — automatically pay more.

The main reason that revenue from fuel taxes has declined is that internal combustion engines have become much more efficient, while political leaders have been reluctant to raise fuel taxes to keep up with inflation.

The federal gasoline tax of 18.4 cents per gallon has not been increased since 1993. The Highway Trust Fund, which finances transportation projects from proceeds of that tax, could become insolvent by 2027 without new sources of funding, analysts say. A list of tax and spending policies that Republicans in Congress are considering includes imposing fees on electric vehicles to help replenish the Highway Trust Fund.

There are 5.4 million electric vehicles on U.S. roads, according to the Alliance for Automotive Innovation, an industry group. But that is roughly 2 percent of the total and not the main cause of revenue gaps.

“Lawmakers are finding a convenient scapegoat, and penalizing the cleanest vehicles on the road while ignoring the real cause of the shortfall,” said Max Baumhefner, director for electric vehicle infrastructure at the Natural Resources Defense Council.

Some of the highest electric vehicle fees are in states that usually elect Republicans, like Texas, Wyoming and Ohio, all of which charge $200 a year on top of the regular registration fee.

Robert Nichols, a Republican state senator in Texas who sponsored legislation in 2023 establishing a fee, said that the amount was determined by analyzing how much the average owner of a gasoline vehicle pays.

“It’s not an anti-E.V. thing. We’ve got Tesla right here in Texas and we’re very proud,” he said, referring to the electric car maker, which has its headquarters and a factory in Austin. “But everybody needs to pay for the road.”

Texas is among the states singled out by Consumer Reports for overcharging electric vehicle drivers. The organization cites Texas’ relatively low gas tax of 20 cents a gallon, well below the national average of about 50 cents.

Mr. Nichols acknowledged that lawmakers were reluctant to raise taxes on drivers of gasoline cars. “Nobody wants that on their tombstone: ‘Raised the gas tax,’” he said.

But increasingly electric vehicle fees are not just a red state phenomenon. Washington, which charges $150, is as progressive as any blue state. And in Vermont, lawmakers passed a fee law last year because they were concerned that growing numbers of electric vehicles posed a risk to state finances, said Patrick Murphy, state policy director at the Vermont Agency of Transportation.

“Legislators recognized that we are nearing the tipping point where E.V. adoption has become mainstream in Vermont,” he said.

Electric vehicles accounted for 12 percent of new car sales in Vermont last year, above the national average of 8 percent. Mr. Murphy noted that fees collected from electric vehicle owners are earmarked for infrastructure like chargers. At $89 a year above the standard registration fee, Vermont’s fee is also at the low end of what states charge.

People on both sides of the debate agree that a fairer system would charge electric vehicle owners per mile driven. But doing that is complicated. Some states are experimenting with technology that tracks mileage and bills owners accordingly. But the systems are expensive and raise privacy issues.

A flat fee is “not perfect,” Mr. Nichols, the Texas legislator, acknowledged. “But it makes a big step forward. It’s fair without setting up a huge bureaucracy.”

Some states, including Iowa, Georgia and Kentucky, tax electric vehicle chargers. But that system misses a lot of cars. Most people charge at home, using public chargers only occasionally.

States that don’t charge electric cars higher fees include Alaska, Arizona, New York and Massachusetts, according to the National Conference of State Legislatures.

In 2026, Vermont plans to be among the first states to try to charge electric vehicle owners based on how much they drive.

That will be relatively easy in Vermont, Mr. Murphy said, because officials already collect odometer readings when owners bring their cars in for annual safety checks. That’s not the case in many states.

Even a system that tracks mileage has flaws. It taxes owners for trips in other states, and does not collect revenue from out-of-state visitors.

“The whole approach we have had is to keep things as simple as possible in the beginning, to get something in place where all vehicles are paying something for our infrastructure,” Mr. Murphy said, “and then to evolve over time to continually make it a fairer system.”

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Fuel prices have been declining steadily since the end of the peak summer driving season, helping boost consumer spending even as progress on broader inflation showed signs of stalling in October, with prices of other goods and services climbing.

The national average price for regular gasoline fell to $2.97 per gallon on Monday, the lowest since May 2021, according to market-tracker GasBuddy.com.

The national average price for regular gasoline fell to $2.97 per gallon on Monday, the lowest since May 2021 Getty Images

The average retail price in Oklahoma was the lowest in the country, at $2.42 per gallon. Hawaii had the highest average prices, at $4.48 a gallon.

The cost of a gallon of gasoline has dropped steadily this year compared to last, as fuel demand growth stalled from the feverish post-pandemic pace of recent years.

“One would need to count over 1,300 days since we’ve seen the national average this low, with the affordability of gasoline at its lowest non-COVID level since 2015,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

Additional downward pressure on gasoline prices will likely continue, with the national average potentially dropping another 10 to 15 cents by Christmas, he added.

Fuel availability improved as refining capacity grew in the US and in other parts of the world, easing some of the sting from global supply disruptions caused by Russia’s invasion of Ukraine. An oil pump in Midland, Texas, above. REUTERS

Product supply of finished motor gasoline, the US Energy Information Administration’s proxy for demand, rose by just 11,000 barrels per day in the first nine months of this year versus the same period last year.

Demand grew by 115,000 bpd in 2023 versus 2022 levels.

Meanwhile, fuel availability improved as refining capacity grew in the US and in other parts of the world, easing some of the sting from global supply disruptions caused by Russia’s invasion of Ukraine. That conflict caused US gasoline prices to jump to a record high of over $5 per gallon in 2022.

US oil refining capacity rose for the second year in a row last year, the EIA’s annual update showed earlier this year. Elsewhere, refining capacity has been boosted by the opening of large new plants, such as Nigeria’s 650,000 bpd Dangote refinery and Mexico’s 340,000 bpd Dos Bocas.

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