President Donald Trump warned gas retailers to lower prices at the pump, saying there will be "big problems" if they don't.
"Gasoline Retailers must get their Prices down, IMMEDIATELY! They're too high considering that Oil is now at $68 a Barrel, and heading south," Trump said in a social media publication on Monday night. West Texas Intermediate, the U.S. benchmark, edged up on Tuesday morning and stood above $71 a barrel.
"The Retailers must quickly react to this statement, and do what they know is right — DROP YOUR PRICE FOR OUR GREAT AMERICAN PEOPLE! There will be no gauging, which is totally illegal. If Retailers don't do this, big problems lie ahead! Start targeting around the $2.50 a Gallon number, and California should stop charging such heavy Taxes on their Gasoline. Soon the Tax will be higher than the Product itself, and the United States will not stand for it, nor will the People of California, who are being abused by these ridiculous Taxes, and by their own Government," Trump added.
Trump has already urged companies to lower prices, particularly since the U.S. and Iran agreed to cease hostilities and work to reopen the Strait of Hormuz.
However, Chevron CFO Eimear Bonner said last week that "it's going to take time" for that to happen.
Speaking on CNBC's "Squawk Box Europe," Bonner said companies are doing "everything we can" to address the situation.
"What I would say is, we're all concerned about prices. So, there is a lot of empathy, whether it's in the U.S. or here in the U.K. or in Europe for consumers," Bonner added.
"It's going to take time though. There is a lag between, you know, oil prices and reductions in oil prices and when that shows up at the pump, but we expect that prices will come down as things continue to normalize."
The comments came shortly after Trump accused companies of "gouging" American consumers by failing to lower gasoline prices fast enough despite a sharp decline in crude oil costs. He said he directed the Department of Justice to investigate the industry.
"The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil," Trump wrote in a social media post on Wednesday. "Customers are being gouged," Trump added, claiming that he had instructed the DOJ to "immediately start looking into this."
Gasoline prices typically lag movements in crude oil markets because fuel retailers and distributors often sell inventory purchased at earlier, higher prices. The issue is politically sensitive as Americans continue to rank inflation and living costs among their top concerns. Although gasoline prices have retreated from recent highs, they remain significantly above levels seen before the war disrupted global energy markets earlier this year.
