$4.49 Gas, a $290 Million Cushion, and the Tax Holiday Ayotte Refuses to Call

There is exactly one piece of the price at the pump that any official in Concord can change with a signature. The Governor has decided to leave it alone. Here is the case for moving it, and the question she should be made to answer if she won’t.

Donald Trump’s strikes on Iran began on February 28. The Strait of Hormuz was declared closed four days later. Gas in New Hampshire went from $2.96 a gallon to $4.49 by mid-May. None of that happened in Concord, and none of it can be fixed in Concord. But one piece of what you pay at the pump is set in Concord, by people who answer to Granite State voters, and right now they are choosing to keep collecting it at full rate.

That piece is the state gas tax, the road toll, and Governor Kelly Ayotte was asked on May 7 to suspend it. She said no. The math on why she should reconsider is not complicated.

What Moved the Price

On February 28, 2026, joint U.S. and Israeli forces hit Iranian targets in what the Pentagon called Operation Epic Fury. Within four days, Iran’s regime declared the Strait of Hormuz closed and began attacking vessels attempting passage. Roughly twenty percent of the world’s seaborne crude moves through that nineteen-mile chokepoint, along with essentially all of Qatar’s liquefied natural gas. When it stops moving, every refinery on earth that was counting on those barrels bids against everyone else for the barrels still flowing.

The result was the largest one-month spike in Brent crude on record, a peak of $138 a barrel on April 7. Prices have eased somewhat as ceasefire rumors come and go, but the physical market is telling a different story than the paper market. The futures contract that pundits quote on television has drifted back near $97 a barrel. The price Asian refiners are paying for actual delivered crude, Dated Brent, sits closer to $132. That $35 gap is the scarcity premium, and it is the real number in the energy market right now. None of this is within New Hampshire’s power to change.

Five Levers to Move Prices Down

Five things bring retail gasoline lower from here. Only two are within American control, and only one is within New Hampshire’s.

1. The Strait reopens for real, not for cameras.

A genuine ceasefire that restores normal tanker traffic through Hormuz is the single biggest variable. Not a “phantom ceasefire” where headlines declare peace while insurers refuse to write hull coverage and tanker captains refuse the route. Real, insurable, sustained passage. Until that happens, the scarcity premium does not collapse, regardless of what futures traders tell each other in New York.

2. OPEC+ unloads beyond the token gesture.

The cartel added 206,000 barrels per day in April. Global daily consumption is roughly 105 million barrels. That is a fifth of one percent. To move price, Saudi Arabia and the UAE, the only members with meaningful spare capacity, would have to push hard against their stated production discipline. They have shown no appetite to do that while their own Hormuz exports remain disrupted.

3. The U.S. drains the reserve and keeps pumping.

The Department of Energy released 17.5 million barrels from the Strategic Petroleum Reserve between March 20 and April 24. The SPR sits at roughly 409 million barrels, a long way from the “fill it up” pledge the Trump administration made on day one. It can drain at a maximum of 4.4 million barrels per day, against U.S. consumption of more than 20 million daily. The reserve is a shock absorber, not a substitute. U.S. production is already near record levels at 13.65 million barrels per day. There isn’t much more pumping to do.

4. Demand cracks.

The cheapest way to lower gas prices, historically, is a recession. Americans drive less when they can’t afford to, and crude collapses. This is the lever nobody campaigns on but everyone secretly counts on. GasBuddy forecasts a summer average of $4.80 a gallon, which itself assumes some demand destruction. If the economy slows harder than expected, prices fall. That is bad news arriving as good news.

5. The tax holiday Ayotte refuses to call.

This is the lever that lives entirely inside New Hampshire’s borders. It is currently bolted shut.

The Case Ayotte Is Ducking

Governor Ayotte declined the suspension on May 7, correctly noting that 23.75 cents is the lowest gas tax in New England. That is also the single largest line item between the wholesale rack price and what you pay at the pump that any New Hampshire official actually controls. The Motor Fuels Tax funds the Highway Fund, and the Ten-Year Transportation Improvement Plan is already projecting funding gaps. A household burning sixty gallons a month is paying an extra fourteen dollars in state tax on fuel that is 54 percent more expensive than it was three months ago.

The Highway Fund argument is serious. It is also losing on the merits. Connecticut, Maryland, New York, and Georgia all suspended state gas taxes during the 2022 oil shock and backfilled the road money from general revenue or surplus. New Hampshire is sitting on a Rainy Day Fund balance above $290 million. The state has the cash to keep the highways funded for the duration of an active oil emergency without taking it out of household budgets that are simultaneously absorbing higher grocery prices and a 38 percent jump in winter heating oil.

There is a fairness problem on top of the cash problem. The New Hampshire Fiscal Policy Institute’s analysis is direct: lower-income households spend a far larger share of their budget on fuel, and rural households drive further to reach work, services, and groceries. A flat per-gallon tax is regressive by design, and it gets more regressive as the price rises, because the same 23.75 cents is a bigger bite out of a North Country commuter’s paycheck than a Bedford executive’s. The road toll hits hardest exactly where the oil shock already hits hardest: Coos County, the North Country, the Lakes Region, and every Granite Stater whose job requires a long daily drive in an old vehicle that burns more per mile. Those are the households Ayotte’s decision leaves fully exposed.

How Long This Lasts

A one-week tax holiday for a one-week price spike would be a gimmick. This is not that. The U.S. Energy Information Administration’s May 2026 forecast, the federal government’s official projection, sees U.S. retail gasoline averaging $3.70 a gallon in 2026 and $3.46 in 2027. The pre-conflict price of $2.96 does not appear anywhere in the federal forecast for the next two years.

If the optimistic federal forecast holds and prices decline at the projected pace, gasoline does not average $2.96 again until somewhere around 2029 or 2030. The honest read is that $2.96 may be gone in nominal dollars for good, because Middle East production capacity has been degraded, U.S. refining capacity is contracting, and the fixed-cost floor at every step of the chain keeps rising. The point for Concord is simple: this is a sustained emergency, not a spike. A policy response scaled to a sustained emergency is justified.

The Bottom Line

Gas prices come down when the war ends, the economy breaks, or the government cuts the tax. The first is not in New Hampshire’s hands. The second is not desirable. The third is sitting on Governor Ayotte’s desk in Concord, and it is not moving.

Granite State Report’s demand to Governor Kelly Ayotte: call a special session before July 4 to suspend the New Hampshire Motor Fuels Tax for the duration of any month in which the national average for regular gasoline exceeds $4.00 per gallon. Backfill the Highway Fund from the $290 million Rainy Day Fund balance, or from FY2025 general fund surplus, or from short-term federal infrastructure draws. Maximum exposure to the Rainy Day Fund under twelve consecutive months of suspension: roughly $188 million, which the state can absorb. Maximum household relief: $14 per month per sixty-gallon-per-month driver, scalable up for heavier users, applied immediately at every pump in the state.

If the Governor will not call that session, she should be required to explain at her next press conference exactly which household budget line, groceries or heating oil or rent or savings, she expects Granite State families to cut to keep $188 million in road revenue whole during a war she did not start but is choosing not to cushion.

Until that question gets answered with a number, the road toll is not a transportation policy. It is a tax collected from the people least able to pay it, during a crisis they did not cause, by an official who has the cash to do otherwise.

The road toll is the piece of this bill New Hampshire controls. It is also the smallest piece. For the full economic accounting — how tariffs, deportations, federal debt, and Fed pressure are stacking another four-figure cost onto every Granite State household this year — see the companion investigation, Trump’s Bill: $4,500 to $7,500 Out of Every Granite State Household.