Donald Trump Moves To Stop Rising Gas Prices

President Donald Trump announced Wednesday that he will work with Republican lawmakers in Congress to "substantially" cut taxes on domestic producers of oil and gas, in a move that could increase production and lower consumer costs. He also plans to allow companies to expense 100 percent of investments in new domestic factory construction and other capital spending.

Why It Matters

Gas prices have been rising in recent weeks, driven by seasonal maintenance work in U.S. refineries, climbing global oil prices, and uncertainty over the Trump administration's sanctions on big producers like Iran.

For Trump, who promised to lower the cost of living for American households during his presidential campaign, bringing down the cost of gas at the pump is important to stave off voters' frustration with his handling of the government. According to the latest polls compiled by FiveThirtyEight, Trump's rate of approval among U.S. voters has gone from 49.7 percent to 48.7 percent between January 26 and February 19.

What To Know

Speaking at a conference hosted by Saudi Arabia's sovereign wealth fund in Miami on Wednesday, the president said: "As long as you invest in America, build in America, and hire in America, that means that I'm fighting for you."

Trump didn't offer any details on the tax cuts he plans to introduce for domestic oil and gas producers, but he said they will be part of the "largest tax cuts" in American history. These will include tax cuts for families and workers such as no tax on tips, a promise he made during his 2024 presidential campaign, and no tax on Social Security.

He vowed to increase the Strategic Petroleum Reserve's stock, saying: "The world runs on low-cost energy, and energy-producing nations like us have nothing to apologize for. We have more energy than any other nation in the world, and we're going to use it."

Increasing the domestic production of oil and gas in the U.S. could potentially lower costs for Americans as it boosts supply. "Price is defined by supply and demand—unless stronger forces like government policies and control outweigh market forces," Karl Brauer, executive analyst at the automobile marketplace iSeeCars.com, told Newsweek.

"If the production of oil in the U.S. increases from more drilling and fewer restrictions, it will almost certainly mean a reduction in the cost of oil because the growing supply side of market forces will push prices down," he said. This, in turn, could bring down the price of gas at the pump, as gas prices are largely determined by global crude oil prices.

But this positive result is far from certain. Oil drillers in the U.S. have so far been cautious about boosting production, saying that global prices do not currently encourage them to do so. And even with increased U.S. production, global market fluctuations could still offset potential domestic benefits.

Why Gas Prices Are Rising—And Will Likely Continue Doing So

As of Thursday morning, the national average price for a gallon of regular gas in the U.S. was $3.165, according to AAA, up from $3.160 a week ago and $3.125 a month ago. In the most expensive state in the country, California, the average price was $4.849 a gallon.

Unfortunately for American drivers, gas prices are heading higher as spring approaches. "Gas Prices continue to inch up thanks to seasonality and refinery snags out west," Patrick De Haan, head of petroleum analysis at GasBuddy, wrote on X. "The national average stands at $3.164/gal, the highest level since mid-October and will likely rise another 15-55 cents over the next 8 weeks."

The rise in gas prices is due, in part, to a routine cycle that repeats itself every year in spring, when U.S. refineries undergo maintenance work and unexpected outages normally occur. The U.S. refining capacity has faced significant challenges in recent years. According to the Energy Information Administration (EIA), refining capacity in the country dropped in 2021 and 2022 after reaching a peak in 2020. While there were increases in 2023 and 2024, capacity is still below pre-pandemic levels.

Trump is trying to encourage producers to expand the number of refineries in the nation and increase their production, but De Haan is doubtful the president will be successful in convincing them it is a good investment. "While there may be a desire for more refineries, good luck convincing a refiner that their hayday is still coming... and to invest billions in building new capacity," he wrote on X.

Limited refining capacity is likely to affect the ability to process additional crude oil into gasoline, potentially limiting supply and keeping oil—and gas—prices elevated.

According to De Haan, the spring "seasonal uptick" will lead to a rise in gas prices of 25 to 60 cents a gallon by the peak, "which is usually around April 10." He warned not to confuse these increases with those linked to the coming tariffs on oil producers like Canada and Mexico.

The Trump administration recently imposed a 25 percent tariff on imports from Canada and a 10 percent charge on natural gas and oil, which is likely to lead to increased costs for imported energy. These tariffs could counteract the intended effects of tax cuts by raising overall production costs, which could then be passed on to consumers at the pump.

Last but not least, some of the Trump administration's policies—especially widespread tax cuts—are likely to drive up inflation, experts warned. This could erode Americans' purchasing power and lead to increased prices for goods and services, including gas.