U.S. gasoline retailers face pressure as Trump calls for $2.50-a-gallon prices

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Gasoline retailers face Trump pressure

Highlights

Donald Trump urged gasoline retailers to lower pump prices to $2.50 per gallon, warning of 'big problems' if prices remain elevated.
The U.S. national average gasoline price is $3.86 per gallon, with California and Hawaii at $5.45 and $5.49, and California's gas tax set to increase to 63.4 cents per gallon on July 1.
Chevron's CFO stated retail prices lag crude declines but should fall further if market normalization continues, as prices dropped after easing Middle East tensions and a U.S.-Iran ceasefire.

Trump demand and current price gap

As first reported by Business Insider, Trump said in a Monday evening Truth Social post that gasoline retailers should lower pump prices immediately, arguing that current prices are too high for Americans. He wrote that there would be no "gauging," likely referring to gouging, and warned retailers that "big problems lie ahead" if they do not cut prices.

He said stations should "start targeting around the $2.50 a gallon number" and singled out California, saying the state should stop imposing heavy gasoline taxes. California is set to raise its gas tax to 63.4 cents per gallon from 61.4 cents per gallon on July 1.

Data from the American Automobile Association show the national average gasoline price stands at $3.86 per gallon as of Monday. California and Hawaii have the highest prices in the country at $5.45 and $5.49 per gallon, respectively.

Oil market backdrop and industry response

Trump's latest comments come about a week after he criticized major oil companies for not lowering pump prices in line with falling crude costs. He said last week that oil producers were keeping prices elevated despite easing tensions in the Middle East and the reopening of the Strait of Hormuz, and added that he had instructed the Justice Department to investigate oil companies.

Chevron finance chief Eimear Bonner told CNBC on Thursday that energy providers are doing what they can, but that retail prices take time to adjust. She said there is a lag between lower oil prices and what consumers see at the pump, while adding that prices are expected to fall further if market conditions continue to normalize.

Gasoline prices have surged since the start of the U.S.-Iran war in February, with the nationwide average climbing to well above $4 per gallon, according to AAA data. Prices have edged down since peace talks with Iran began and after Trump announced a ceasefire last week.

In our earlier coverage of Trump’s call for gasoline retailers to cut prices, we noted his demand that stations move toward about $2.50 per gallon and his warning of “big problems” if prices don’t drop. We also highlighted his request for a Justice Department probe into whether oil companies are failing to pass lower crude costs through to consumers amid shifting geopolitical and election-year pressures.

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