Center for American Progress

The Trump Administration Is Adding to the Pain at the Pump

The Trump Administration Is Adding to the Pain at the Pump

President Trump’s energy policies are increasing fuel costs for drivers, giving oil companies too much power over taxpayer-owned energy reserves, and locking the United States into a dangerous long-term dependence on oil.

A young woman is seen at a gas pump. (Getty/Stewart Cohen/Pam Ostrow)
A young woman is seen at a gas pump. (Getty/Stewart Cohen/Pam Ostrow)

When U.S. families fuel up for the first road trips of the summer this Memorial Day weekend, they will be paying close to $3 per gallon across much of the country—a 50 cent per gallon jump from just a year ago.

These recent increases in U.S. gasoline prices are primarily the result of changes in the global oil market. Since January 2017, oil prices have surged from $52 per barrel to more than $71 per barrel. The International Energy Agency attributes these price increases to rising demand for oil, production declines in Venezuela, and uncertainty about how renewed U.S. sanctions will affect Iranian oil exports, among other factors.

Although the power of any U.S. president to control domestic gasoline prices is limited, the Trump administration shares considerable responsibility for worsening the pain at the pump that U.S. consumers are currently experiencing, as well as for increasing the likelihood that families in America will be paying more for fuel for years to come. The Trump administration’s foreign policy decisions have not only contributed to recent spikes in global oil prices, but its so-called energy dominance agenda is increasing fuel costs for drivers, giving oil companies too much power over taxpayer-owned energy reserves, and making the U.S. economy more vulnerable to oil price volatility.

Here are five things to know about how and why the Trump administration’s energy policies are contributing to higher gasoline bills for U.S. families.

  1. President Donald Trump’s announcement that the United States is withdrawing from the Iranian nuclear agreement drove up global oil prices, contributing to an immediate jump in U.S. gas prices. On May 8, President Trump formally announced that he will reimpose economic sanctions on Iran, which will restrict Iran’s ability to sell its oil on the world market and reduce available global oil supplies. Global oil prices rose approximately $7 per barrel and U.S. gas prices climbed 15 cents per gallon in the five weeks leading up to the announcement as traders saw Trump intensify his criticism of the Iran agreement on Twitter and appointed John Bolton, a vocal critic of the Iran agreement, as his national security adviser. “Withdrawing from the Iran nuclear deal will support higher oil prices,” one oil industry CEO told CNN after Trump’s announcement.
  1. The Trump administration’s proposal to lower fuel efficiency standards for cars and trucks will force U.S. households to spend approximately $1,000 more on gasoline every year. Improvements to fuel economy in cars and light trucks since 1975 have saved U.S. drivers 1.5 trillion gallons of gasoline and approximately $4 trillion in fuel costs. The Trump administration’s effort to weaken fuel efficiency standards for future light-duty trucks and cars will not only increase projected fuel costs for U.S. families, but the proliferation of inefficient vehicles will also apply upward pressure on oil and gasoline prices as long as the new gas-guzzling vehicles stay on the road. The Trump administration is aiming to further restrict fuel economy gains by proposing to: rescind $4.3 billion in funds from the Advanced Technology Vehicles Manufacturing Loan Program at the Department of Energy (DOE); fully eliminate the vehicle efficiency program in the DOE’s Office of Energy Efficiency and Renewable Energy; revoke California’s ability to establish and enforce more stringent fuel economy requirements; and lower penalties for car manufacturers who fail to meet fuel efficiency standards.
  1. The Trump administration’s fire sales of federal oil and gas leases are helping oil companies pad their financial books with speculative reserves but are not delivering benefits to taxpayers or consumers. President Trump’s secretary of the interior, Ryan Zinke, has repeatedly boasted about the amount of federal lands and oceans he is offering to the oil and gas industry for drilling. Yet Secretary Zinke’s fire sale approach to public lands has yielded meager returns.

Late last year, for example, the Department of the Interior put more than 10 million acres up for bid to oil and gas companies in the National Petroleum Reserve-Alaska. The 2017 auction, which Zinke touted as an “unprecedented sale,” fell flat, yielding bids on only 7 of the 900 tracts of land that were offered. Likewise, a March 2018 lease sale in the Gulf of Mexico, which the Trump administration hyped as the “largest oil and gas lease sale in U.S. history,” fell well short of expectations in terms of total acres sold and fiscal returns to taxpayers.

While taxpayers are getting shorted at Zinke’s auctions, the oil industry is walking away with sweetheart deals. The Interior Department’s liquidation of public lands has allowed companies to lock up drilling rights for less than the price of a cup of coffee, and the leases Zinke is selling carry no mandate or meaningful incentive to actually put those resources into production. Under the terms of the leases that Zinke is selling through the U.S. Bureau of Land Management, oil and gas companies pay a rental fee of only $1.50 per acre for the first five years of a lease, and $2 per acre per year thereafter. This is in sharp contrast to leases issued by the state of Texas, for example, where the rental rate for oil and gas leases jumps from $5 per acre each of the first two years to $2,500 per acre in the third year; this policy discourages speculative leasing and encourages swift and diligent development of Texas-owned resources.

With little incentive to strictly lease federal lands that companies plan to drill immediately, the oil industry is sitting idle on nearly 8,000 federal oil and gas permits, an all-time high, as well as more than 20,000 square miles of leased but nonproducing public lands—an area twice the size of Massachusetts. Bottom line: The Trump administration’s bargain basement sell-off of America’s public lands is giving oil companies—not the federal government—unchecked power to decide whether to bring taxpayer-owned resources to market or to leverage the undeveloped reserves as financial tools with which to increase their companies’ share prices and financial valuations.

  1. Since the elimination of a ban on crude oil exports in 2015, the amount of U.S.-produced crude oil staying in the United States has declined. In December 2015, Congress passed and then-President Barack Obama signed a law eliminating restrictions on the export of U.S. crude oil to foreign markets. Previously, oil companies could only export refined products, certain Alaskan crude oil, and crude oil bound for Canada, as well as through specially granted licenses. U.S. Energy Information Administration (EIA) data show that since the passage of the 2015 law, exports of crude oil jumped from an average of 14,145 barrels per month in 2015 to 33,999 barrels per month in 2017, a 140 percent increase. This increase in crude oil exports, however, far outpaced any gains in U.S. crude oil and lease condensate production; net annual U.S. crude and lease condensate production minus crude oil exports fell in both 2016 and 2017 compared with either of the two years immediately before the ban was lifted. Even though oil production levels remained high once the export ban ended, less domestically produced oil stayed in the United States overall.
  1. U.S. consumers are getting hurt by the Trump administration’s energy policies, but companies are reaping a windfall. In April 2018, the typical U.S. household paid about $241 for gasoline, up by $29 over the same one-month time period in April 2017. Meanwhile, five of the world’s biggest oil companies with major U.S. operations—Exxon Mobil, Chevron, BP, ConocoPhillips, and Royal Dutch Shell—reported a combined $17.7 billion in profits in the first three months of 2018, a 44 percent increase in profits from the first quarter of 2017. Analysts expect oil companies’ profits to continue to rise this year as they benefit from the higher prices that consumers are paying at the pump.

A Center for American Progress study of the most recent major spike in U.S. prices—when gasoline prices rose from less than $2 per gallon in 2010 to more than $3 per gallon in 2012—found that for every penny increase in the average U.S. gasoline price over a three-month period, the five major oil companies listed above could expect to see a combined $200 million increase in quarterly profits. If this relationship still holds, it would mean that the 15 cent per gallon increase in gas prices that U.S. consumers experienced as President Trump signaled his withdrawal from the Iran agreement could be expected to translate to $3 billion in additional profits for Exxon Mobil, BP, ConocoPhillips, Royal Dutch Shell, and Chevron.


The actions the Trump administration has taken that are increasing the pain at the pump are components of an energy agenda that is aimed, first and foremost, at establishing and preserving America’s long-term dependence on oil and coal. At every opportunity—from its regulatory actions to its budget proposals—the Trump administration has sought to expand subsidies and loopholes for oil and mining companies while creating barriers to clean, affordable energy production and advanced vehicle technologies.

These efforts to preserve America’s fossil fuel dependence and to restrict consumer access to cheaper and cleaner energy options make the U.S. economy unnecessarily vulnerable to the volatility of oil markets. If the Trump administration continues to press forward with its one-dimensional energy agenda, consumers should brace themselves for more spikes in gas prices in the coming years, more U.S. oil being shipped overseas, and more expensive summer road trips.

Matt Lee-Ashley is a senior fellow at the Center for American Progress. Mary Ellen Kustin is the director of policy for Public Lands at the Center. 

The authors would like to thank Lia Cattaneo, Nicole Gentile, and Meghan Miller for their contributions to this column.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.


Matt Lee-Ashley

Senior Fellow

Mary Ellen Kustin

Director of Policy, Public Lands