Donald Trump has upped the ante on the nation’s fuel retailers, making it plain: cut your gasoline prices now or you’ll have ‘big problems’. In his view, if you can buy a barrel of crude for $68, the pump should show it. It’s a pricing stand-off, and he’s not shy about the legal and political fallout for the industry if they don’t play ball.
White House puts its foot down
Trump says he’s told the Department of Justice to see if oil companies are holding back on lowering retail prices even as crude has. He doesn’t mince words about any kind of price gouging – call it unlawful if you like – and says he won’t put up with it.
A post of his that made the rounds put it in blunt terms: with oil at $68 and falling, retailers need to make a move for the good of the consumer, and they should do it right away.
So what does the administration expect? Here is the bottom line from Trump:
– No more stalling on pump prices
– Let the cheaper crude be felt by the buyer
– Don’t be seen as a gouger
– Make amends before we have to enforce it
The numbers behind the push
He wants to see some action around the $2.50 a gallon mark, and he’s making that the standard for a fair deal. “Prices are too high when Oil is at $68 a Barrel and going south,” he says.
It’s hard to miss the White House’s point: the drop in crude hasn’t been mirrored at the pump. They are letting it be known that a lag in pass-through could mean a fine or some other form of attention.
California under fire
Then there is the matter of California. Trump has come after the state’s fuel tax, saying it’s the reason consumers are overpaying. “Soon the Tax will be higher than the Product itself,” he said, dismissing them as ‘ridiculous’.
It makes for a handy example for the White House to have, one that underlines the fact that policy has as much to do with what you pay at the station as the open market does.
Reading the room and the world
You can’t ignore the politics of a full tank in this country. How the pump moves can change a voter’s mind. With midterms in November, Republicans are on guard to keep their slim majorities in Congress while the public is preoccupied with the cost of living.
There’s a global side to this, too. We saw oil jump when the US and Israel went after Iran, and then some in return on the part of the Iranians against us and our hosts in the Gulf. Add in some worry over the Strait of Hormuz and you had a run-up in prices.
Things have mellowed since. Some talking between Washington and Tehran has put a lid on the market, and you can find benchmark crude for $68 again. There’s been an extension on the April ceasefire, even if both sides still have a bone to pick with each other.
Where do we go from here?
All eyes are on whether the retailers will budge, how fast the DOJ gets to work, and if the tax row with the states is to heat up. The way the White House is looking at it, the speed of the pass-through is a litmus test for the industry.
Here is what to watch for in the coming days:
– What the DOJ has to say on the gouging claims
– If we see a move to $2.50 a gallon
– How California handles the heat on its taxes
– Whether the softening in crude holds up
Make no mistake, if the numbers at the pump don’t follow the crude, the White House is ready to make them. For families trying to make ends meet, it’s a question of when the good news from the world stage is going to show up at the local forecourt.
