President Trump on Wednesday ordered the Department of Justice to open a price-gouging probe because gas prices are not falling as fast as oil prices, which plunged to their lowest levels since the start of the Iran war.
Mr. Trump accused Big Oil of refusing to slash gas prices “commensurate with the sharply lower prices they are paying for oil” after the U.S. and Iran entered a 60-day truce to finalize the Middle East conflict and constrain Tehran’s nuclear program.
The average U.S. price per gallon stood at $3.93 on Wednesday, compared to $4.50 a month ago, according to the AAA motor club.
Mr. Trump is impatient with the pace of the decline, given the precipitous drop in oil prices from over $100 per barrel at the height of the war to just above $70 for Brent crude this week, as final-stage negotiations play out in Switzerland.
“Those prices are dropping like a rock! In other words, customers are being ’gouged,’” Mr. Trump wrote on Truth Social.
The move takes a page from President Joseph R. Biden’s playbook. He routinely cited corporate greed as the reason prices did not fall fast enough. Mr. Biden even directed the Justice Department to investigate whether the oil industry was manipulating gas prices shortly after Russia invaded Ukraine.
The recent spike in gasoline prices stems from the military campaign the U.S. and Israel launched against Iran on Feb. 28 to prevent it from getting a nuclear weapon and restrict its ability to fund terror in the Middle East.
Tehran closed the Strait of Hormuz — a critical choke point — in retaliation, causing oil prices to soar.
Oil prices dropped after the U.S. and Iran reached a memorandum of understanding to reopen the strait and enter 60 days of final-stage peace talks.
Crude oil is the primary ingredient in gasoline, so any increase or decrease in crude prices means ups and downs at the gas pump.
Analysts say gas prices tend to fall more slowly than they rise when supply shocks occur, as businesses across the supply chain protect against losses or factor in future costs from another disruption.
There are additional costs involved with gas prices, including state and federal taxes.
Further, gas prices tend to rise when demand increases around the summer travel period, which could counteract decreases related to the ceasefire.
Patrick de Haan, who tracks prices for Gas Buddy, said on social media that gas prices would be around $3.50-$3.70 per gallon if there were no lag between oil and gas prices.
However, he said prices remain above $3.90 because “prices are sticky on the way down” as stations try to make up for losses in March and April, when oil prices spiked.
Mr. Trump wants companies to hurry up.
“Gasoline prices better start going down a lot faster than what I’m seeing!” he wrote on social media.
The average gas price per gallon was $2.98 at the start of the Iran war.
Throughout the conflict, Mr. Trump said short-term pain from higher prices would be worth preventing Iran from getting a nuclear weapon.
U.S. and Iran negotiators are wrangling over Tehran’s nuclear ambitions and other matters in final-stage peace talks in Switzerland.
Mr. Trump insisted that talks were progressing well despite naysayers in the media and elsewhere. He said Iran is not charging tolls on ships transiting the Strait of Hormuz and has not received any financial benefits.
The president said the U.S., eventually, will unfreeze some Iranian assets to let the country buy American farm products.
“We will be releasing some of their money, that is totally controlled by us, to our Farmers and Ranchers, for the purchase of Corn, Wheat, Soybeans, and more. Food is desperately needed in Iran, and we will be purchasing it for them exclusively from the United States,” Mr. Trump said Wednesday on social media.
