President Orders Investigation into Fuel Price Discrepancies
US President Donald Trump announced on Wednesday that he has directed an inquiry into several prominent energy firms, including Chevron, ExxonMobil, Shell, and BP. The President alleges that these companies are engaging in “price gouging” by failing to adequately reduce gasoline prices at the pump, despite a noticeable decrease in global wholesale oil prices.
Speaking from the White House, President Trump expressed his belief that “gasoline prices should be much lower” and suggested that a fair price would be around $2.25 per gallon. His remarks follow a period where wholesale oil prices had surged due to the US-Israel conflict with Iran, reaching nearly $120 a barrel for Brent crude in May. While prices have since receded, with Brent crude dropping below $74 a barrel on Wednesday, they still remain higher than the pre-conflict level of approximately $70 a barrel. Similarly, US wholesale oil benchmark WTI crude, which dipped to $70 a barrel, is also above its pre-war price of about $60 a barrel.
Industry Responds to Accusations
The American Petroleum Institute (API), representing the US oil and gas sector, countered the President's claims, stating that fuel prices do not always move in direct correlation with crude oil costs. Bethany Williams, a spokesperson for the API, acknowledged the industry's shared objective of providing relief at the pump and stabilizing global energy markets. She also highlighted that ongoing supply chain disruptions, refining processes, and inventory levels continue to be affected by the conflict.
Department of Justice Involvement
President Trump had earlier indicated on social media his intention to have the Department of Justice (DOJ) immediately investigate the matter. A DOJ spokesperson confirmed to the BBC that the affordability of fuel is considered a national security issue with broad economic implications for American citizens, though they did not confirm the launch of a formal investigation.
“The price of fuel is not only national security issue, it impacts the wallet of every American. We will always commit to ensuring affordability in this nation,” a DOJ spokesperson told the BBC.
A White House spokesperson reiterated the administration's focus on economic relief, noting President Trump's past efforts to achieve low gas prices and his consistent view that energy market disruptions would be temporary once the situation with Iran was resolved.
Context of Price Fluctuations
Oil prices dramatically increased after Iran's response to US-Israeli strikes on February 28, which led to the disruption of the Strait of Hormuz. While the average price of regular gasoline in the US has fallen to about $3.93 a gallon from its April peak of over $4 a gallon, it remains above pre-war levels. These developments echo similar accusations faced by UK oil firms regarding petrol price hikes following the Iran conflict, though a UK competition regulator found no widespread evidence of unfair practices in May.
Source: Trump accuses big oil firms of price-gouging drivers