By Hugh Cameron
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Gasoline prices are easing nationwide, offering some relief to American drivers after months of disruption, but the decline is not occurring as quickly as the administration would hope.
With retail costs dropping at a slower rate than oil prices themselves, President Donald Trump has said the Department of Justice will investigate alleged price gouging by U.S. oil majors—an allegation industry representatives deny.
And the president has now ordered the owners and operators of gas stations across the country to “get their Prices down, IMMEDIATELY!”
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“If Retailers don’t do this, big problems lie ahead!” Trump wrote in a post on Truth Social. “Start targeting around the $2.50 a Gallon number, and California should stop charging such heavy Taxes on their Gasoline.”
Which States Have the Highest Gas Prices?
When the United States and Israel launched the first strikes on Iran on February 28, and Tehran effectively closed off the Strait of Hormuz—through which around a quarter of global oil moves—the resulting supply shock rapidly inflated global oil prices and briefly pushed Brent crude, the international benchmark, to over $120 a barrel.
This matched the highs reached during the 2022 energy crisis, which followed Russia’s invasion of Ukraine, but prices of both Brent and West Texas Intermediate (WTI) have fallen substantially to around $70 in recent weeks amid hopes of a breakthrough in negotiations between the U.S. and Iran.
Gas prices have also dropped sharply, though experts note that delayed pass-through and “rocket and feather” pricing dynamics mean it will take longer for these to reach pre-war levels.
As of Tuesday, the national average gas price has fallen to $3.85 per gallon of regular unleaded, according to AAA—down from $4.36 a month ago—but there is still significant variation depending on where one chooses to fill up.
Thanks to factors including lower demand and waived state taxes, Indiana currently boasts the lowest prices in the nation at $3.18 per gallon. Indiana is followed by Texas ($3.30), Oklahoma ($3.38) and Tennessee ($3.42)—three states which also benefit from proximity to many of the nation's production and refining hubs.
On the other end, Hawaii drivers are currently paying $5.47 per gallon, while California ($5.43) and other West Coast states are still seeing prices at least a dollar higher than the nationwide average.
These are the 10 states with the highest gas prices as of Tuesday, according to AAA:
- Hawaii—$5.47
- California—$5.43
- Washington —$5.16
- Alaska—$4.83
- Oregon—$4.68
- Nevada —$4.62
- Washington, D.C.—$4.14
- Illinois—$4.12
- New York—$4.11
- Idaho—$4.10
- Michigan—$4.08
Analysts previously told Newsweek that the West Coast would be hit hardest by the Iran war supply disruptions, given its outsized reliance on Middle Eastern imports and the closure of major refineries in recent years.
California also has the highest combined sales and excise taxes on fuel. While many states suspended these duties during the conflict, the state is moving ahead with a planned increase, effective as of Wednesday.
Trump noted the “heavy taxes” charged by California on Tuesday, which he said would soon “be higher than the product itself.”
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Trump Targets Oil and Gas Companies Over ‘Gouged’ Consumers
As well as retailers, the stickiness in fuel costs has prompted an accusation from Trump that the country’s major oil and gas companies are engaged in price gouging.
"The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil. Those prices are dropping like a rock!" he wrote on Truth Social last week. He added that customers were being “gouged,” and said his Justice Department would "immediately" begin looking into the matter.
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“The price of fuel is not only national security issue, it impacts the wallet of every American," a spokesperson for the Justice Department said in a statement shared with Newsweek last week. "We will always commit to ensuring affordability in this nation.”
However, in a post to Truth Social on Wednesday night, Trump said oil and gasoline prices are falling, though he argued pump prices should be dropping more quickly. He announced that the Freedom Fuel Network plans to lower gas prices at 25 “FREEDOM FUEL” stations across the Philadelphia area on July 3 as part of the nation's 250th birthday celebrations, praising the company for what he described as a patriotic gesture and encouraging other retailers to follow suit.
Trump also expressed confidence that gas prices will soon return to the record lows he said Americans experienced before the U.S. military operation in Iran, while touting the country's strength and highlighting his 2024 presidential victory in Pennsylvania.
Patrick De Haan, the head of petroleum analysis at GasBuddy, previously told Newsweek that there appeared to be no observable shift in “retail gas price behaviors.”
“However, some c-store operators, given how high prices went and now how oil has dropped, are reporting very healthy margins—but the pace of decline is typical," he said.
And the industry itself has rejected allegations of gouging, noting that gas price movements typically trail oil prices by several weeks.
"Our industry shares the goal of delivering relief at the pump and restoring stability to global energy markets," said Bethany Williams, a spokesperson for the American Petroleum Institute (API), the national trade association representing the country’s oil and natural gas sector.
“Gasoline prices don't move in lockstep with crude oil, especially during a major global disruption that is still affecting supply, refining and inventories," she told Newsweek last week.
Contact Newsweek editors on this story: Matthew Robinson, Anna Commander and Sam Wilson and Gray R. Thomas.
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