Oil prices are falling back toward normal levels as the U.S. military is escorting commercial ships carrying oil tankers through the critical Strait of Hormuz. But drivers are still paying nearly $4 per gallon for gas.

President Donald Trump says oil companies are price gouging their customers and has asked the Department of Justice to look into the matter.

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The average cost of a gallon of regular gas is $3.93, down about 13% from the month-ago average of $4.52 per gallon. That’s still roughly 70 cents higher than the price this time last year, when the average was $3.22 per gallon, according to AAA.

How does that compare to the movement in oil prices? According to the West Texas Intermediate measure, oil was trading around $70 per barrel on Wednesday — down more than 26% over the past month as U.S.-Iran negotiations have progressed.

In an after-midnight Truth Social post, Trump said he is asking the Department of Justice “to immediately start looking into this.” Officials have not yet confirmed which companies may be probed or the timeline for carrying out the work.

“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! In other words, customers are being ‘gouged,'” Trump wrote. “Gasoline prices better start going down a lot faster than what I’m seeing!”

The president’s focus on gas prices comes four and a half months from the midterm elections, with most voters saying they disapprove of the president’s handling of the economy in recent polls.

Oil and gas industry denies price gouging

The oil and gas industry argues that there is nothing unusual about the gap between falling oil prices and retail gas prices because it always takes time for pump prices to adjust to swings in the oil market. Crude oil accounts for roughly 57% of what drivers pay for regular gas, according to the Energy Information Administration.

Responding to Trump’s call for a price gouging probe, the American Petroleum Institute said it shares the Trump administration’s goal of “delivering relief at the pump and restoring stability to the global energy market.” But as spokesperson Bethany Williams told NBC News Wednesday, “Gasoline prices don’t move in lockstep with crude oil, especially during a major global disruption that is still affecting supply, refining and inventories.”

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Among economists, there’s a saying that gas prices “go up like a rocket and fall like a feather,” Mark Zandi, chief economist at Moody’s Analytics, told Money earlier this year.

Iranian officials signed a memorandum of understanding on Sunday that lays out a path to ending the war, but analysts caution that any escalation in the Iran war could send oil prices back up. In a separate Truth Social post on Wednesday, Trump said he has Iran “‘on the ‘ropes’ ready to go down for the fall, willing to give us practically anything.”

Gasoline retailers have been among the financial winners as energy prices have soared during the Middle East conflict, according to Tom Kloza, an independent oil analyst. For example, Circle K’s parent company has seen its margin expand to 52.4 cents per gallon, an increase of 9.2 cents from the previous year, Kloza wrote on X.

But Trump is far from being the first person to accuse gas companies of price gouging, and it’s unclear how this probe could lead to relief for consumers, if at all.

Drivers in 19 states are still paying more than $4 per gallon for gas. Prices are highest in Western states: A gallon of gas costs $5.54 in Hawaii and California, $5.30 in Washington, $4.95 in Alaska, $4.80 in Oregon and $4.73 in Nevada, according to AAA.

Lawsuit: Gas stations are using a controversial AI tool

On Monday, a proposed class-action lawsuit filed in California accused Marathon Petroleum, Circle K, BP, Walmart, Speedway and other gas retailers of unlawfully using artificial intelligence technology to set prices in the state. The lawsuit alleges that gas stations are using an AI pricing tool from Kalibrate to “ensure that no matter where a ⁠driver turns, the price for gasoline is artificially high,” according to the complaint.

In its marketing materials, Kalibrate, an analytics company founded in the U.K., recommends to gas stations that even when there are “falling oil prices… it’s critical to avoid a race to the bottom,” the lawsuit said, blaming the company’s AI pricing tool for the high prices in the state.

Meanwhile, average gas prices have fallen below $3.50 per gallon in Indiana ($3.33), Texas ($3.38), Oklahoma ($3.43) and Tennessee ($3.47). You can see a full list of gas prices by state at gasprices.aaa.com

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