White House says gas and diesel prices will soon drop rapidly, but economists see little relief before the election

The White House said on Saturday that gas and diesel prices will soon drop rapidly thanks to President Donald Trump’s actions to expand American energy¹. It said the administration began dismantling what it called failed Biden-era anti-energy policies on day one, and claimed that the country is producing record amounts of energy¹.

The administration pointed to energy agreements and regulatory rollbacks in its push to lower fuel costs³. It also pointed to the Defense Production Act, which it said is being used to direct millions of dollars toward expanding domestic fuel supply³. Information released by the White House on 25 October indicated that the measures include using the act to increase supply⁵.

The administration will use the Defense Production Act to fund $150 million for increased gasoline and diesel production⁴. Trump announced plans to invoke the act to increase US oil production and refining capacity amid high fuel, food and housing costs⁶.

Why it matters to investors

The White House’s statement is a forecast of lower prices rather than a report of one¹. Economic experts say Trump’s deal with Russia and his recent invocation of the Defense Production Act will hardly affect prices before Election Day². Experts also noted caveats about the $150 million programme⁴.

The political stakes are high. The measures have failed to change the economic headwinds facing Republican candidates², as high fuel, food and housing costs weigh on voters⁶.

For energy markets, the measures matter through refining capacity and domestic output⁶, and through the deal with Russia that experts discount as a near-term influence on prices². The sum named is $150 million under the Defense Production Act⁴, which the White House describes as directing millions of dollars into supply³.

What to watch

The test of the White House’s claim that prices will soon drop rapidly¹ is the pump price in the days before the vote, which experts expect to change little².

Investors will also watch which refiners and producers receive Defense Production Act funding^3,4, and whether the administration extends the act’s use beyond the announced $150 million^4,5. The deal with Russia will be judged on the same test: its effect on prices at the pump, which experts expect to be slight before Election Day².