Donald Trump has claimed that US fuel prices are “not very high, relatively speaking” as his administration faces growing public frustration over rising costs linked to the war with Iran. The national average gas price stood at about $4.16 per gallon on Tuesday, according to AAA – $0.37 lower than a month ago, but still roughly $1 more expensive than the same time last year.
The US president has repeatedly downplayed the increase in fuel costs since the start of the US-Israel war on Iran in late February. Speaking to reporters on Tuesday, Trump said the administration was releasing “a lot of oil coming out of the Hormuz strait”, a crucial passageway for global trade through which about 20% of the world’s oil passes. The strait has been all but closed since the war began, with Iran threatening ships and maritime insurers cancelling war risk cover.
Trump also noted that gas prices remain lower than during the Biden administration, “and he wasn’t stopping the country from having a nuclear weapon”. Record-high gas prices in 2022 were exacerbated by the war in Ukraine, which tightened global oil supply. The sharp uptick in energy prices has largely driven inflation to 3.8% last month, the highest increase since 2023, and has cost American households an estimated $100bn, according to Moody’s Analytics.
The Bureau of Labor Statistics is set to release May inflation estimates on Wednesday, which economists expect to show persistently high inflation. This report will likely influence the US Federal Reserve’s decision on interest rates at its meeting next week, as the central bank balances elevated inflation with a relatively strong labour market.
