Key facts
- President Donald Trump ordered the Justice Department to investigate oil companies for alleged price gouging.
- The Justice Department and FTC have formally asked state attorneys general to join the investigation.
- The agencies stated they are monitoring oil markets for evidence of price-fixing or monopolization.
- The letter warns that market volatility does not justify anticompetitive practices or price manipulation.
- Crude oil prices have fallen significantly, but retail gasoline prices have not decreased at the same pace.
President Donald Trump has directed the Justice Department to investigate major oil companies, alleging they are price gouging consumers by not lowering gasoline prices in line with falling crude oil costs. Trump stated on social media that the "big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil," adding that "Those prices are dropping like a rock!"
The Justice Department, along with the Federal Trade Commission, has since issued a letter calling on states to join the investigation. Gas prices have eased in recent weeks, with the average price on Friday morning just under $4 per gallon, according to AAA, while crude oil hovered just under $69 per barrel. These prices have fallen from earlier highs driven by concerns that conflict in the Strait of Hormuz could disrupt shipping through the waterway, which normally carries about 20 percent of the world’s oil. The easing of prices has coincided with ongoing peace talks between the U.S. and Iran.
The agencies acknowledged they do not have the authority to enforce state price-gouging statutes but urged attorneys general to examine whether emergency pricing laws have been violated in their jurisdictions. They warned that "Recent volatility in crude oil prices does not suspend either the antitrust laws or state consumer protection laws, and it does not authorize companies to manipulate retail prices or collude with their competitors."