As a record number of Americans prepare to hit the road for the July 4 holiday, gasoline prices are finally beginning to ease—but not as quickly as President Donald Trump would like.

AAA expects 61.4 million Americans to travel at least 50 miles from home by car over the holiday weekend, slightly above last year’s record of 61.3 million. Drivers are paying a national average of about $3.93 per gallon, down from $4.53 a month ago, but still nearly $1 higher than before the Iran conflict and about 22% above prices a year ago.

Last week, Trump posted on Truth Social that major oil companies were failing to lower gasoline prices in line with falling crude oil prices, accused the industry of “gouging” consumers, and called on the Justice Department to investigate.

Energy analysts say the situation is more complicated.

Oil companies generally do not set the retail price drivers pay at the pump. Individual gas station owners and retailers determine those prices, and they often continue selling fuel that was refined from crude oil purchased weeks earlier at significantly higher prices.

“There is a saying that gasoline prices rise like a rocket and fall like a feather,” David Doherty of BloombergNEF said, noting that it typically takes around three weeks for major changes in crude oil prices to work their way through the supply chain. Karen Young, an energy expert at Columbia University, described Trump’s accusations of price gouging as “political theater.”

The delay is built into the energy system itself. Refineries purchase crude oil well before it is processed into gasoline. The finished fuel must then travel through pipelines, storage terminals, tanker trucks, and local distribution networks before reaching neighborhood service stations.

Today, roughly 57% of the price consumers pay for gasoline reflects the cost of crude oil, with the remainder covering refining, transportation, marketing, and federal, state, and local taxes.

Crude oil prices themselves have fallen sharply. U.S. benchmark West Texas Intermediate (WTI) crude has dropped about 27% over the past month to roughly $70.45 per barrel, only modestly above where prices stood before the conflict with Iran.

However, global energy markets have not fully normalized. Shipping traffic through the Strait of Hormuz, which normally carries about 20% of the world’s oil supply, remains below pre-conflict levels. Mines still need to be cleared in some shipping areas, and Middle Eastern oil production is gradually recovering.

The gap between falling crude prices and slower declines at the gas pump has temporarily boosted profits for some fuel retailers. Industry analysts note that convenience-store chains and gas station operators are currently enjoying stronger margins after wholesale prices dropped faster than retail prices.

Relief appears to be on the way.

Patrick De Haan of GasBuddy expects national gasoline prices to move closer to $3.70 per gallon as oil markets continue stabilizing and shipping through the Strait of Hormuz returns to normal.

The U.S. Energy Information Administration also forecasts lower fuel costs ahead, projecting retail gasoline prices will decline about 6% in 2026 as global oil production outpaces demand. The agency expects crude oil to average its lowest annual price since 2020 before rising modestly in 2027.

The issue extends beyond family vacation budgets. Energy costs accounted for more than 60% of the increase in May’s inflation report, which showed consumer prices rising 4.2% from a year earlier—the highest annual inflation rate in more than two years.

With the midterm elections approaching, the White House is eager to demonstrate that energy costs are falling. Treasury Secretary Scott Bessent has also announced a 60-day waiver on sanctions covering purchases of Iranian oil in an effort to increase global supplies and ease price pressures.

For families preparing for a holiday road trip, the takeaway is straightforward. Gasoline prices are moving lower, but the process takes time. Comparing prices between stations, using fuel rewards programs, and avoiding high-priced highway exits remain some of the best ways to save money while the market gradually works the remaining war premium out of every gallon.

JBizNews Desk
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