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Trump Orders Justice Department to Investigate Gas Prices
President Says Oil Companies Have Not Cut Pump Prices Fast Enough After Drop in Crude Costs
Key Takeaways:
- Trump said he ordered the Justice Department to examine gasoline prices, accusing major oil companies of not lowering pump prices fast enough.
- National gasoline prices were $3.93 on June 24, above the five-year seasonal average as inventories remained near seasonal lows.
- Trump said oil companies could face trouble if gouging occurred, while industry officials cited lingering supply, refining and inventory pressures.
President Donald Trump said he has ordered the Department of Justice to look into gasoline prices, complaining that they aren’t falling fast enough.
“The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil,” he said in a post on Truth Social. “Gasoline prices better start going down a lot faster than what I’m seeing!”
Trump did not elaborate on the instructions given to the DOJ.
Average nationwide gasoline prices surged to the highest level since 2022 following strikes by the U.S. and Israel on Iran, which resulted in the closure of the Strait of Hormuz — a key waterway for about a fifth of seaborne crude. They have declined less quickly than crude oil — which accounts for half the price of gasoline — after Washington and Tehran signed an interim peace deal that saw traffic through the waterway pick up.
U.S. retail gasoline prices remain above the five-year seasonal average, standing at $3.93 as of June 24, according to data from the American Automobile Association.
Trump said he thinks prices should be $2.25 by now, citing the “gusher” of crude coming out of the Persian Gulf now that ship traffic through the strait is increasing. Large oil companies are to blame, he said, for the fact that pump prices aren’t lower.
“It’s Exxon Mobil. It’s Chevron. It’s Shell. It’s BP — it’s a lot of them,” the president said June 24. “The oil companies are possibly gouging. I hope they’re not. Otherwise they’re going to be in big trouble.”
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Part of the reason pump prices haven’t fallen faster stems from summertime demand and fuel requirements.
“It has to do with the seasonality of gasoline prices which tend to be higher in the summer, and in general, there tends to be a lag of about 10 days or so between wholesale prices on Wall Street and retail prices at the pump,” Daan Struyven, co-head of global commodities research and head of oil research at Goldman Sachs, said on Bloomberg Television. “Structurally, we think refined product markets are tighter than crude markets.”
High gasoline prices have become a political vulnerability for the Republican Party ahead of U.S. midterm elections in November. Democrats eager to highlight cost-of-living issues have been making pump prices a key point of attack.
The supply situation for both crude and gasoline has improved, but stockpiles remain depleted. U.S. commercial inventories of gasoline held by oil refiners, trading firms and wholesalers which supply filling stations are currently around the lowest levels for the time of year since 2014, according to U.S. government data.
Historically, economists and energy experts say, it’s often taken longer for oil and gasoline prices to fall after a run-up in costs, especially when provoked by a physical disruption — even as those constraints abate.
“Our industry shares the goal of delivering relief at the pump and restoring stability to global energy markets,” Bethany Williams, a spokesperson for the American Petroleum Institute, said by email. “Gasoline prices don’t move in lockstep with crude oil, especially during a major global disruption that is still affecting supply, refining and inventories. Our focus remains on supporting market stability and delivering the energy consumers need.”
Trump isn’t the first president to point the finger at oil companies for high gasoline prices. Former President Joe Biden repeatedly blamed oil companies, refiners and gasoline retailers for passing costs to motorists, when the Ukraine war helped push the cost of a gallon of unleaded past $5.
In November 2021, Biden pushed the Federal Trade Commission to investigate possible anti-consumer behavior, citing a similar dynamic as Trump: “Gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining.” Roughly a year later, Biden accused oil companies of engaging in “war profiteering.”
Former President Barack Obama went as far as announcing the creation of a federal fraud task force to investigate whether traders and speculators were driving up fuel prices in 2011.
Trump’s broadside comes despite his close relationship with the oil industry — which helped bankroll his 2024 campaign for the White House and have seen many of their policy priorities embraced by the administration.
