DOJ and FTC Tell State AGs to Investigate Illegal Activity Behind High Gas Prices as Oil Costs Fall

The Justice Department and the Federal Trade Commission issued a joint letter to state attorneys general on July 3, signed by Associate Attorney General Stanley Woodward Jr. and FTC Chair Andrew Ferguson.

The core claim: crude oil prices are dropping rapidly, but retailers are not passing those savings to consumers at the pump.

"Recent volatility in crude oil prices does not suspend either the antitrust laws or state consumer protection laws, and it does not authorize companies to manipulate retail prices or collude with their competitors," the letter states, according to CBS News, which reviewed it.

The letter also says: "Business may not use market volatility as cover for anticompetitive practices, fraud, or any other lawlessness that harms Americans."

The federal government has no authority to enforce price-gouging laws. That power sits with the states. The DOJ and FTC can pursue antitrust violations — collusion, market manipulation, monopolization. Price gouging is a separate legal category, and many states have enacted their own laws specifically targeting price gouging during periods of market disruption or emergency, according to the letter itself.

So the federal agencies are doing what they legally can: monitoring petroleum markets for antitrust violations and telling state AGs to use their own tools on the price-gouging side.

The letter includes a screenshot of a Truth Social post that Trump issued on June 24. In that post, Trump wrote that oil companies are not dropping prices at the pump in line with lower crude costs, called it "gouging," and stated he had instructed the DOJ to "immediately start looking into this."

On Monday, June 30, Trump followed up with another Truth Social post warning gasoline retailers to "get their prices down immediately," citing crude at around $68 a barrel, according to indexbox.io.

Treasury Secretary Scott Bessent separately warned gas stations that the administration is "watching," according to Fox Business.

Gas prices did spike sharply earlier this year after the U.S. launched military operations against Iran. Since then, prices have been coming down, but the gap between falling crude costs and the retail pump price is what the administration is flagging.

AAA put the national average for regular gasoline at $3.823 on July 3, 2026. A month ago, that figure was $4.261 — a drop of about 44 cents. WTI crude, as of July 3, was sitting near $68.78 per barrel, per OilPrice.com.

The question underlying the letter: should 44 cents of retail savings be more? That turns on refining margins, distribution costs, taxes, and local market competition. None of these factors are addressed with specifics in the federal letter.

The oil industry and free-market critics will push back hard on this framing. Gas prices do not track crude oil in real time. Refiners lock in crude contracts weeks in advance, so the price consumers pay today often reflects oil purchased before the recent drop. Retail stations, especially independent operators, have thin margins and factor in local competition, taxes, and supply chain costs. The price transmission lag is a documented feature of how the refined-products market works, not evidence of illegal conduct.

No investigation has been announced, no charges have been filed, and no company has been named in the letter as a target. The DOJ and FTC are publicly monitoring. They have not presented evidence of collusion or price manipulation. Whether the administration can convert political pressure into a provable antitrust case remains an open question.

State attorneys general in states with price-gouging statutes will need to decide whether to act. The letter urges those states to review whether enforcement is warranted under those laws.

The federal side is constrained to antitrust enforcement. For the DOJ's Antitrust Division to bring a case, it would need evidence of actual collusion or market manipulation among competitors. A high evidentiary bar. Price-trend data alone does not clear it.

The unresolved question: are the margins currently being captured by refiners and retailers the result of a normal post-shock pricing lag, or is there coordinated conduct that crosses the line into antitrust territory? The DOJ says it is monitoring. It has not said it has found anything yet.