Lamont Floats One-Month Gas Tax Holiday as CT Fuel Prices Surge

Lamont Proposes One-Month Connecticut Gas Tax Holiday as Prices Surge

Governor Ned Lamont said he is open to suspending Connecticut's gasoline and diesel taxes for one month as fuel prices spike sharply in response to the ongoing U.S.-Iran conflict, which has pushed gasoline prices up roughly 50 cents per gallon in a single week.

Lamont first raised the idea at a press event in Meriden on March 10, 2026, and reiterated it in media appearances the following day. The governor said he would discuss the proposal with legislative leaders.

"I'll sit down with the legislature and see if that's something they want to prioritize," Lamont said.

The proposal would temporarily suspend the state's 25-cent-per-gallon retail levy on regular gasoline and its 48.9-cent-per-gallon diesel tax. Lamont said he hopes the conflict with Iran could resolve within a month — the same timeframe he proposed for the tax holiday.

Cost and Funding Options

The Connecticut Special Transportation Fund would absorb an estimated $40 million in lost revenue under the one-month suspension, according to state estimates cited by CT News Junkie.

Lamont suggested two possible ways to cover the cost without draining the transportation fund:

• Pause the $500 million sales-tax rebate program: Connecticut's consumer rebate program could be temporarily delayed to free up funds
• Draw from a human services response account: A designated reserve fund could be used to offset the revenue shortfall

No formal appropriation or emergency funding mechanism has been publicly detailed. The options would require legislative consent or, in some cases, executive action depending on how existing funds are structured.

Legislative Reaction: Push for Broader Relief

Connecticut legislative leaders responded with general support but suggested the relief package could go further. Senate President Pro Tem Martin M. Looney said lawmakers should explore suspending three state fuel taxes, not just the two Lamont mentioned.

Democratic leaders in the legislature praised Lamont for opening the conversation on relief, though no formal bill had been introduced as of publication. No Republican opposition statements were publicly released in connection with the initial proposal.

No public hearing date or floor vote has been scheduled. Lamont said the proposal remains under discussion with legislative leadership.

Context: Fuel Price Spike from U.S.-Iran Conflict

The proposal comes as Connecticut motorists are seeing unusually sharp price increases at the pump. Prices rose approximately 50 cents per gallon in the week leading up to Lamont's announcement, according to WFSB and CT Mirror, driven by disruption in global oil markets following the escalation of the military conflict between the U.S. and Iran.

Connecticut's base gasoline tax of 25 cents per gallon does not fluctuate with market prices but layers on top of whatever the market rate is. When pump prices surge, the effective burden of all taxes as a share of the total price decreases, but the dollar-for-dollar savings from a tax suspension remain fixed. For drivers filling a 15-gallon tank, a 25-cent reduction in the gasoline tax would save approximately $3.75 per fill-up.

Diesel users — including commercial truckers, delivery services, and some public transit operators — would see larger relief under the proposal, given the higher 48.9-cent-per-gallon diesel levy.

Prior Connecticut Gas Tax Holidays

Connecticut has suspended its gas tax before. In April 2022, the state temporarily suspended the gasoline tax for three months in response to fuel price spikes following Russia's invasion of Ukraine. That suspension cost the Special Transportation Fund approximately $90 million.

No similar suspension has been enacted since, making Lamont's current proposal the first gas tax holiday discussion in Connecticut since 2022.

Got a tip? Reach out to us at tips@thequinnipiacpost.com.