Donald Trump said Wednesday that he had instructed the US Department of Justice to investigate oil companies for alleged price gouging, accusing them of not lowering gas prices enough amid conflict in the Middle East.
“The big oil companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for oil. 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,” Trump wrote in a social media post late Tuesday night. “Gasoline prices better start going down a lot faster than what I’m seeing!”
Since the late-night post, no further details on the investigation have been released.
Oil prices have softened in recent weeks as the US and Iran work through peace talks. The two countries reached a 60-day ceasefire agreement last week. After the deal, the strait of Hormuz, where a fifth of the world’s oil and gas shipments pass through, reopened, though traffic through the strait remains much lower compared to pre-conflict passthrough.
In turn, gas prices around the world have fallen. Brent crude, the global benchmark, has fallen below $75 for the first time since the start of the war. US gas prices at the pump have fallen from a peak of $4.56 per gallon in May to a current average of $3.92. While a relief for drivers, average gas prices a year ago were still $0.70 a gallon cheaper, at $3.22 a gallon.
Record-high gas prices have soured many Americans, especially those who voted for Trump with hopes that he would put an end to inflation. Price increases reached a generational high in 2022 under Joe Biden’s presidency, peaking at 9.1%.
During a rally in Pennsylvania on Tuesday, Trump tried to reassure voters that relief is coming.
“That oil is going to come charging down, and with oil comes everything else,” Trump said.
The drop in prices may be slow. Experts are skeptical that gas prices can fully go back to prewar prices for the rest of the year because of halts to oil production and refining facilities that have reduced capacity during the Iran conflict.
US inflation in May hit a three-year peak at 4.2%, largely because of elevated gas prices. Core inflation, which doesn’t include the food and energy prices, was 2.9% – still slightly elevated compared to previous months.
Though Trump has been adamant that the US Federal Reserve lower interest rates, officials at the central bank released projections that include one interest rate hike this year amid higher inflation.