Trump Has A Plan To Lower Gas Prices, Experts Discuss Potential Backlashes

President Donald Trump issued plans Wednesday to cut taxes for domestic oil and gas producers while allowing full expense deductions for new factory construction, aiming to boost production and lower consumer costs.

“As long as you invest in America, build in America, and hire in America, that means that I’m fighting for you,” Trump told  a conference hosted by Saudi Arabia’s sovereign wealth fund held in Miami. 

The initiative comes as gas prices continue climbing. The national average for regular gasoline reached $3.165 per gallon Thursday, up from $3.125 a month ago, with California leading at $4.849, AAA data shows.

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Industry analysts expect further increases. “Gas Prices continue to inch up thanks to seasonality and refinery snags out west,” Patrick De Haan, head of petroleum analysis at GasBuddy, wrote on X. He said prices could rise another “15-55 cents over the next 8 weeks.”

While increased domestic production could potentially lower costs, experts note several complications. U.S. oil companies have shown reluctance to boost output, citing unfavorable global prices. Limited refining capacity may also constrain benefits from additional crude oil production.

“While there may be a desire for more refineries, good luck convincing a refiner that their hayday is still coming… and to invest billions in building new capacity,” De Haan said in another post on X.

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The administration’s delayed recent 25% tariff on Canadian imports and 10% charge on natural gas and oil could offset tax cut benefits by raising production costs that companies may pass to consumers.

“Price is defined by supply and demand—unless stronger forces like government policies and control outweigh market forces,” Karl Brauer, executive analyst at iSeeCars.com, told Newsweek.

Trump’s broader tax cut plans include eliminating taxes on tips and Social Security benefits. He also said at the Miami conference that he would increase Strategic Petroleum Reserve stockpiles, saying, “The world runs on low-cost energy, and energy-producing nations like us have nothing to apologize for.”

The Energy Information Administration reported over the summer that U.S. refining capacity remains below pre-pandemic peaks despite increases in 2023 and 2024, following declines in 2021 and 2022.

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