US President Donald Trump has told gasoline retailers to bring their prices down “immediately.”
In a post on Truth Social, the US President went on to warn retailers against what he described as unlawful price gouging. “There will be no gauging [sic], which is totally illegal,” he said, further cautioning that businesses refusing to lower prices could face consequences.
“If Retailers don’t do this, big problems lie ahead! Start targeting around the $2.50 a Gallon number,” he wThe Retailers must quickly react to this statement, and do what they know is right — DROP YOUR PRICE FOR OUR GREAT AMERICAN PEOPLE!”
Donald Trump
Trump’s comments suggest that he believes retailers have room to reduce pump prices and should pass any cost savings on to consumers. However, he did not specify what actions the administration might take if retailers fail to meet the pricing target he outlined.
The US President’s latest remarks come less than a week after he ordered an investigation into major oil companies over high petrol prices. “The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil,” he wrote in a Truth Social post on June 24.
Trump’s demand for lower petrol prices in the US comes as he faces criticism for launching the war on Iran and for its impact on costs for millions of Americans, and as November’s mid-term elections draw closer.
Trump’s war in Iran and Tehran’s subsequent closure of the Strait of Hormuz rocked global markets and sent energy prices soaring, resulting in higher gas prices for Americans at the pump. That has translated into concerns that consumers may punish Republicans in November’s midterm elections.
Trump has repeatedly said that fuel prices would “come down like a rock” after the conflict with Iran ends, but economists have disputed Trump’s assertions and predict longer-term economic repercussions due to the conflict.
In recent weeks, however, crude oil prices have retreated following a ceasefire and renewed diplomatic engagement between Washington and Tehran. The easing of geopolitical tensions has reduced fears of supply disruptions, leading to expectations that motorists would soon see lower prices at service stations.
Despite the decline in crude prices, retail gasoline prices have fallen more gradually, prompting criticism from Trump and some consumer advocates. Energy analysts note that pump prices do not always move in tandem with oil prices because retailers and refiners often sell fuel that was purchased or refined when crude prices were higher. Additional costs, including transportation, refining, distribution, taxes and seasonal fuel blends, also influence what consumers ultimately pay.
Economists describe the pattern as the “rockets and feathers” phenomenon, in which gasoline prices tend to rise rapidly when oil prices increase but decline more slowly when crude becomes cheaper. Market experts say this lag is a common feature of fuel markets rather than evidence of illegal pricing, although regulators can investigate suspected anti-competitive practices or unlawful price gouging where applicable.
Trump’s demand for a nationwide target of around $2.50 per gallon would represent a significant reduction from the current national average, which remains well above that level despite recent declines. Analysts caution that achieving such a price across the country would be difficult because fuel costs vary considerably between states due to differences in fuel taxes, environmental regulations, transportation expenses and local market conditions. States such as California and Hawaii typically record some of the nation’s highest gasoline prices because of higher taxes and stricter fuel standards.
Trump Singles Out California
In his post, Trump took particular aim at California, urging the state to also lower its taxes on petrol. He criticized the state’s fuel tax policies and argued that they contribute to higher prices for motorists.
“Soon the Tax will be higher than the Product itself, and the United States will not stand for it, nor will the People of California, who are being abused by these ridiculous Taxes, and by their own Government.”
Donald Trump
California Governor Gavin Newsom, a Democrat, has been one of Trump’s fiercest critics in the US President’s second term, including of his push to promote fossil fuels.
California is also doubling down on renewable energy and is hoping to have a carbon-neutral electrical grid within 20 years. However, with petrol prices surging since the US-Israel war on Iran, the Trump administration is pushing for more domestic fuel production and has invoked emergency powers to restart an oil pipeline in California that had been shut down because of a massive spill in 2015.
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