Despite Trump’s threat against oil companies, prices at the pump are a result of the president’s decision to go to war.
President Trump is threatening oil companies with Justice Department action (politicized lawfare, really) because gas prices are not decreasing at a rate commensurate with the decrease in oil prices. The latter have dropped by more than a third, from a high of about $120 per barrel of Brent crude during the mid-March height of the Iran war (including Iran’s de facto closure of the Strait of Hormuz) to about $76 now.
In a Truth Social post, the president claims that this can only be happening because “customers are being ‘gouged,’” so he has “instructed the DOJ to immediately start looking into this.” “Gasoline prices better start going down a lot faster than what I’m seeing.”
Obviously, crude oil and refined gas are not the same thing. Since crude is just a part (yes, the most important part) of gasoline, it should be obvious that prices do note track exactly. Consider a straightforward example: war typically knocks out some refinement capacity and increases other costs, so the price of gasoline can remain elevated even if oil prices are falling.
Moreover, gouging is a wayward concept. Prices are a function of scarcity and naturally rise when there is a reduction in the supply of a commodity that is in high demand. To artificially mandate that the price remain low rather than naturally find its higher level encourages hoarding — which also reduces supply and doesn’t help consumers, even if politicians can preen that they’ve dealt with the “gougers.”
Putting all that aside, though, the president of the United States does not get to set commodity prices — not for gas, not for oil, and not for other items in the private economy. There is no federal law against supposed price-gouging. If prosecutors have evidence to establish that oil companies have collusively set an artificially high price, there could be an antitrust violation. But there is no reason to believe this has happened. The incentive of the companies is to compete, not collude. See, for example, the Congressional Research Service report titled “Gasoline Price Increases: Federal and State Authority to Limit ‘Price Gouging” (“Although federal antitrust laws restrict the coordinated manipulation of a market, no federal statute specifically addresses price spikes for retail gasoline that result from the non-coordinated behavior of individual sellers”).
Gas prices are up because of the war. They are coming down, just not as fast as oil prices are. The president is scapegoating oil companies over an inevitable consequence of his own decision-making. And he is abusing the Justice Department to try to coerce lower prices.