Trump asks DOJ to probe oil companies over high gas prices
President Donald Trump says he's asking the Department of Justice to look into oil companies, saying that prices at the pump aren't coming down fast enough for Americans.
Trump wrote on Truth Social that the prices that oil companies are paying are "dropping like a rock," but prices aren't coming down as quickly. "In other words, customers are being 'gouged,'" Trump wrote.
Americans faced rising gasoline prices starting in March, when the Trump administration began a war with Iran. In the months that followed, Iran has at times strategically closed off the Strait of Hormuz to hamper the United States' supply of foreign oil.
Prices at the pump peaked in May and have been falling for six weeks. They surged for three months after the war began. They spiked 21.2% in March, marking the largest monthly increase since the Labor Department began keeping track in 1967. Gas prices rose 5.4% in April and 7% in May.
The national average price for a gallon of regular gasoline on June 24 is $3.93, down from $4.03 last week and $4.52 last month, according to AAA. It is still up from $3.22 this time last year.
Trump wrote on Truth Social on June 24 that Iran confirmed to the United States that it is not charging tolls or extracting any other fees on ships traveling through the Strait of Hormuz. He said that if this information turns out to be false, he would end the peace negotiations.
Trump will visit Capitol Hill on June 24 to sign a bill and hold a meeting with Republican senators. He's facing Congress less than 24 hours after the Senate's symbolic vote to end the war in Iran.
Where are prices headed?
Economists expect inflation to continue to run hot in the months ahead as companies still face high insurance costs and uncertainty about their ships’ ability to travel safely through the Strait of Hormuz. However, gas prices are expected to continue dropping.
Patrick De Haan, head of petroleum analysis at GasBuddy, predicts the national average for a gallon of regular gasoline could fall below $3 later this year.
Earlier this week, the U.S. Treasury issued a 60-day license allowing the sale, delivery and export of Iranian oil – a decision De Haan said would likely speed up gas prices’ decline.
“Allowing Iran to sell oil is allowing more supply into a market that has been short of oil for the last couple of months because of the strait, so from a consumer aspect, that’s good,” De Haan told USA TODAY.
Trump is not the first to call for an investigation
Calls to investigate large oil and gas companies have also come from the other side of the political aisle. Last month, Sen. Ed Markey, D-Massachusetts, sent a letter to Federal Trade Commission Chairman Andrew Ferguson requesting the agency investigate companies that may be engaged in price gouging, market manipulation, or anti-competitive pricing practices.
“If supply chain disruptions driven by the United States’ war with Iran were the only cause of the rising prices at the pump, it would stand to reason that oil companies would be seeing expenditures and losses rise at the same time as gasoline costs,” Markey wrote in the letter. “We are not seeing a neutral effect on profits, however ‒ we are seeing oil companies secure surging excess windfall profits that are directly tied to their establishment of higher gasoline costs.”
De Haan said it's "justifiable" that stations are cautious about cutting prices too quickly: They do not want to get stuck selling below replacement costs if prices rebound.
"If [the Iran war] hadn’t happened, margins wouldn’t have shrunk significantly in March and April, and they also wouldn’t have expanded to the current level now,” he added. “All of this can be justified by market movements, and that’s why any investigation will likely fail. It’s because gas stations are responding to the current environment, and I don’t think you can penalize the speed of decline.”
(This story was updated to add new information.)
Contributing: Reuters