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US President Donald Trump accused oil companies of failing to pass on the benefits of falling crude prices to consumers, alleging that motorists are being “gouged” at the pump and directing the Department of Justice (DOJ) to investigate the industry.
In a post on Truth Social on Wednesday, Trump said gasoline prices were not falling fast enough despite a sharp decline in global oil prices as tensions in West Asia eased and shipping through the Strait of Hormuz showed signs of recovery.
“The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil. Those prices are dropping like a rock! In other words, customers are being ‘gouged’,” Trump wrote.
“I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I’m seeing!” he added.
Gasoline prices fall for sixth straight week
Trump’s remarks came even as data showed Americans are already seeing some relief at the pump.
Gasoline prices fell for a sixth straight week, dropping 14.1 cents a gallon over the past week to a national average of $3.85 per gallon on Monday, according to price-tracking service GasBuddy. That marks a 15 per cent decline from the May peak.
Prices fell in most states. Gasoline dropped 25 cents a gallon in Colorado over the past week, 22 cents in Arizona and 21 cents in Ohio, GasBuddy data showed.
Crude prices ease as supply fears recede
Oil markets have continued to unwind the risk premium built up during the recent conflict involving Iran.
Brent crude futures fell 1.0 per cent to $76.30 a barrel on Wednesday, while US West Texas Intermediate (WTI) crude declined 1.1 per cent to $72.43 a barrel. Both benchmarks have now fallen to their lowest levels since early March after posting losses of around 1 per cent on Tuesday.
The decline has been driven largely by signs that shipping through the Strait of Hormuz — one of the world’s most important oil transit routes — is gradually returning to normal.
Two smaller crude tankers sailed through the strait on Monday, even though Iran said it had again closed the waterway over the weekend. Still, transits remain well below levels seen before the conflict began in late February.
Supply risks still linger
Analysts say the risk of a sudden spike in gasoline prices has eased for now, but the outlook remains fragile.
Tighter supplies from refinery outages and the approaching Atlantic hurricane season could also reverse recent price declines.
TotalEnergies shut down its 238,000 barrel-per-day refinery in Port Arthur, Texas, last week after a lightning strike knocked out power. A full restart is expected within seven days. On Sunday, a fire also broke out at Marathon Petroleum’s 631,000-barrel-per-day Galveston Bay refinery in Texas City, Texas.
Political pressure builds on Trump and Republicans
The drop in gasoline prices may ease pressure on Trump and fellow Republicans, who are trying to hold narrow majorities in Congress in November’s midterm elections and have faced criticism from consumers over high prices.
Fuel costs remain a politically sensitive issue in the US, and Trump has made lower energy prices a central part of his economic message. While retail gasoline prices often lag crude oil because of refining costs, transportation expenses, taxes and fuel inventories bought at higher prices, the president argued that the gap between falling crude and pump prices was too wide to ignore.
The DOJ has not yet said what form any investigation might take. But any review could examine whether refiners, distributors or retailers are keeping margins unusually high despite lower crude costs.
Trump keeps pressure on Big Oil
For now, lower crude prices and easing tensions in West Asia have reduced fears of another energy shock. But Trump’s intervention shows that his administration wants consumers to feel the benefit quickly — and is prepared to put pressure on the oil industry if they do not.
