President Donald Trump has directed the Justice Department to investigate major oil companies, alleging they are "gouging" consumers by not lowering gasoline prices quickly enough despite a significant drop in crude oil costs.
In a post on Truth Social early Wednesday, Trump stated that oil companies were not reducing their pump prices in proportion to the sharp decrease in the price they pay for crude. "Those prices are dropping like a rock!" he wrote. "In other words, customers are being 'gouged.' I have instructed the DOJ to immediately start looking into this," Trump added, warning, "Gasoline prices better start going down a lot faster than what I'm seeing!"
The president's directive comes as national average gasoline prices have been declining for six consecutive weeks. According to GasBuddy, the average price fell 14.1 cents per gallon over the past week, reaching $3.85 on Monday. This represents a roughly 15 percent decrease from the peak prices seen in May. In some areas, like Colorado, average prices dropped by 25 cents per gallon in the last week.
The national average price dipped below $4 per gallon last week for the first time since March. This decline follows a period of market easing after the U.S. and Iran announced a memorandum of understanding intended to de-escalate conflict and restore shipping through the Strait of Hormuz. Brent crude fell 1 percent to $76.30 per barrel on Wednesday, while U.S. West Texas Intermediate dropped 1.1 percent to $72.43 per barrel, both benchmarks at their lowest levels since early March.
However, Trump believes consumers should experience a more rapid and substantial reduction at the pump. Experts note that gasoline prices do not always move in lockstep with crude oil prices due to various factors. Karen Young, a senior research scholar at Columbia University's Center on Global Energy Policy, described Trump's statement as "political theater," explaining that state and local taxes, refining costs, transportation expenses, and retailer pricing strategies all influence the final price drivers pay. She added that it typically takes several weeks for crude oil price drops to be reflected at the refinery and then at the consumer level.
Retail stations may also be selling fuel purchased when oil prices were higher. Despite these market dynamics, Trump's intervention puts pressure on refiners, distributors, and retailers as his administration seeks to demonstrate that lower oil prices are translating into consumer savings. The Justice Department has not detailed the form this investigation might take, but it could examine whether companies have maintained unusually high profit margins throughout the fuel supply chain.