Former President Donald Trump has instructed the Department of Justice to investigate major oil companies, accusing them of "gouging" customers by not lowering gasoline prices in line with falling crude oil costs. Trump made the announcement on Truth Social, stating that while crude oil prices are dropping significantly, the prices at the pump are not decreasing at a commensurate rate.
"The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil," Trump wrote on the social media platform. "Those prices are dropping like a rock! In other words, customers are being ‘gouged.’ 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!"
Brent crude oil prices have fallen to just over $72 a barrel as of Wednesday morning, a significant decrease from their peak of $118 a barrel in April. In comparison, the national average gasoline price stands at $3.92 a gallon, according to the American Automobile Association, down from a peak of approximately $4.56 a gallon in May. While crude oil prices have dropped about 23% since May, gasoline prices have fallen around 14% during the same period. Before the recent geopolitical events, gas prices had previously dipped below $3 a gallon. National gas prices have now been on a downward trend for six consecutive weeks.
Trump's criticism comes as the Strait of Hormuz has reopened, a critical waterway through which nearly a fifth of the world's annual seaborne oil supply passes. The reopening followed the announcement of a memorandum of understanding with Iran. However, the waterway's central channel is not fully open due to lingering concerns about mines, which U.S. and Iranian officials are reportedly working to address, according to Energy Secretary Chris Wright. Concerns also exist regarding Iran's potential requirement for commercial ships to obtain insurance to transit the strait, although Trump stated that Iran has assured the U.S. there would be no such charges during a 60-day cease-fire extension period. He warned that negotiations for a peace deal would end immediately if this information proved false.
This action by Trump mirrors a strategy employed by the Biden administration, which also threatened to investigate companies for potential price gouging during periods of high inflation.
