The government can lower gas prices through a handful of tools: releasing crude oil from the Strategic Petroleum Reserve, suspending federal or state fuel taxes, waiving summer fuel-blend rules, investigating price gouging and market manipulation, speeding up permits for domestic drilling and pipelines, and pressuring foreign producers like OPEC to pump more oil. Only the first three work quickly. The rest take months, years, or the cooperation of governments that answer to no one in Washington. No single lever controls the price at the pump, because gasoline costs depend on global crude markets, domestic refining capacity, seasonal regulations, and taxes stacked at multiple levels of government.
Releasing Oil From the Strategic Petroleum Reserve
The fastest supply-side tool the executive branch has is the Strategic Petroleum Reserve, a government-owned stockpile of crude oil held in underground salt caverns along the Gulf Coast. As of late 2025, the reserve held roughly 413 million barrels.1U.S. Energy Information Administration. U.S. Ending Stocks of Crude Oil in SPR
Under the Energy Policy and Conservation Act, the President can order a drawdown when there is a severe energy supply interruption, defined as a significant reduction in supply that causes a severe price increase likely to have a major adverse impact on the national economy.2Office of the Law Revision Counsel. 42 USC 6241 – Drawdown and Sale of Petroleum Products The Department of Energy then sells crude through competitive auctions to the highest qualified bidder. The oil moves by pipeline to Gulf Coast refineries where it becomes gasoline and diesel. The goal is to flood the market with enough supply to take the edge off a price spike.
Every barrel sold has to be bought back eventually. The Department of Energy has targeted a repurchase price of roughly $79 per barrel or below, meaning the government tries to sell high during emergencies and buy back low once markets stabilize.3Department of Energy. U.S. Department of Energy Announces a Solicitation to Purchase Oil for Strategic Petroleum Reserve Replenishment That replenishment strategy matters, because a reserve drained without being refilled loses its power as a deterrent. Markets respond partly to the threat of a release, not just the release itself.
Suspending Federal or State Fuel Taxes
Every gallon of gasoline sold in the United States carries a federal excise tax of 18.4 cents: an 18.3-cent base rate plus a 0.1-cent surcharge for the Leaking Underground Storage Tank Trust Fund. Diesel carries a combined 24.4 cents per gallon.4Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax Congress can temporarily suspend these collections through legislation, giving drivers an immediate cut equal to the full tax amount. Federal gas tax holidays get proposed almost every time prices spike, though Congress has never actually enacted one.
State fuel taxes add a much larger and more variable layer. As of January 2026, state taxes and fees ranged from 9.0 cents per gallon in Alaska to 70.9 cents per gallon in California, with several states above 50 cents.5U.S. Energy Information Administration. Many States Slightly Increased Their Taxes and Fees on Gasoline Some states also charge sales tax on top of their per-gallon excise, so the total tax bite grows as the base price of gasoline rises. State legislatures and governors have occasionally enacted short-term tax holidays, usually lasting one to several months, during price surges.
The downside is revenue. Federal fuel taxes fund the Highway Trust Fund, which pays for road and bridge construction. State fuel taxes serve a similar purpose. Suspending them means either cutting infrastructure spending, backfilling the gap from general funds, or accepting a shortfall. There is also a real pass-through problem. Nothing forces gas stations to lower prices by the full tax amount, so some of the benefit can get absorbed by retailers or wholesalers rather than reach drivers.
Waiving Summer Fuel Blending Rules
The Environmental Protection Agency regulates the chemical makeup of gasoline sold at different times of year to manage smog. During warmer months, gasoline must meet lower volatility standards. Summer-grade fuel evaporates less readily, which reduces the emissions that form ground-level ozone. Summer blends cost more to produce because refiners have to strip out lighter, cheaper compounds like butane.6Office of the Law Revision Counsel. 42 USC 7545 – Regulation of Fuels The seasonal switchover each spring reliably pushes prices up.
When fuel supply gets tight, the EPA can issue emergency waivers allowing cheaper winter-blend gasoline to keep flowing into the summer months. The statute requires a finding that extreme and unusual supply circumstances exist, typically from a natural disaster, refinery failure, or pipeline disruption. Waivers are limited to the smallest affected geographic area for periods of 20 days at a time, though they can be renewed.6Office of the Law Revision Counsel. 42 USC 7545 – Regulation of Fuels The same authority applies to E15 gasoline, a blend containing 15 percent ethanol normally restricted during summer because of higher volatility. In April 2025, the EPA used an emergency waiver to allow nationwide E15 sales through the summer driving season.7Environmental Protection Agency. EPA Addresses E-10 Standards, Allows for Nationwide Year-Round E15 Sales
These waivers carry an air quality cost. Summer fuel standards exist because volatile organic compounds mix with heat and sunlight to create smog, and allowing higher-volatility blends into warmer months increases those emissions, particularly in areas already struggling with ozone pollution.8United States Government Accountability Office. GAO-05-421 Gasoline Markets – Special Gasoline Blends Reduce Emissions and Improve Air Quality, but Complicate Supply and Contribute to Higher Prices The tradeoff is short-term price relief for short-term air quality impact, which is why these waivers stay narrow and temporary.
Investigating Price Gouging and Market Manipulation
When prices surge, the natural question is whether oil companies or gas stations are pushing prices past what supply and demand justify. The federal government has real enforcement tools, though they are narrower than most people assume.
The Federal Trade Commission enforces the Petroleum Market Manipulation Rule, created under the Energy Independence and Security Act of 2007. The rule prohibits anyone in wholesale petroleum markets from engaging in fraud, making materially false statements, or reporting misleading price data to federal agencies. Violations can carry civil penalties of up to $1 million per day, with each day of a continuing violation counted separately.9Federal Trade Commission. Guide to Complying with Petroleum Market Manipulation Regulations That power targets manipulation of wholesale markets, like deliberately reporting false pricing data to skew benchmarks, not simply charging high retail prices.
For outright collusion, the Department of Justice can bring criminal charges under the Sherman Act. Price-fixing among competitors is a felony.10Office of the Law Revision Counsel. 15 USC 1 – Trusts, Etc., in Restraint of Trade Illegal If gas station owners in a region secretly agreed to set prices together, that would be a textbook Sherman Act violation. In practice, most retail gas price spikes reflect refiners and stations independently responding to the same supply crunch rather than coordinating behind the scenes.
One boundary is worth stating plainly. There is no federal law that prohibits gas stations from simply charging a high price absent fraud or collusion. Many states have their own anti-price-gouging statutes that kick in during declared emergencies, typically triggered when prices exceed a set threshold, often 10 to 15 percent above the pre-emergency average. Outside a declared emergency, a retailer is generally free to charge whatever the market will bear. Proposals for a broader federal price-gouging ban on gasoline have been introduced in Congress repeatedly but have never become law.
Speeding Up Domestic Drilling and Pipeline Permits
The tools above address short-term pain. Expanding domestic oil production is the government’s main long-term lever, and it moves slowly. Federal agencies control the leasing of public land for drilling, and the Bureau of Land Management must approve an Application for Permit to Drill before any company can begin extraction on federal territory.11eCFR. 43 CFR 3171.5 – Application for Permit to Drill The process involves environmental review, consultation with surface-managing agencies, and compliance with the National Environmental Policy Act. Once approved, onshore permits are valid for two years with a possible two-year extension.
A permit is one step in a much longer chain. For onshore leases, the assessment and development process leading up to a permit can take three to four years. Offshore projects average seven to eight years from lease to production because of the engineering complexity involved. When a president announces faster permitting, the market signal is real. Investors and energy companies adjust their plans. But the additional barrels do not arrive at refineries for years.
Pipelines matter too. The Federal Energy Regulatory Commission issues certificates of public convenience and necessity before major natural gas pipeline projects can proceed.12eCFR. 18 CFR Part 157 – Applications for Certificates of Public Convenience and Necessity Bottlenecks in pipeline capacity or refinery throughput can create regional price spikes even when national crude supply is adequate. Streamlining approvals helps, but each project faces its own environmental review and often significant local opposition.
Pressuring OPEC and Other Foreign Producers
Crude oil is priced on a global market, so production decisions made in Riyadh or Moscow directly affect what Americans pay in Phoenix or Philadelphia. The executive branch’s main tool here is old-fashioned diplomacy, pressuring members of OPEC and the broader OPEC+ coalition to increase their daily output quotas. When these nations agree to pump more, global benchmark prices like Brent Crude drop, which lowers the raw material cost for domestic refineries and eventually shows up at the pump.
Results have been mixed. OPEC members have their own economic incentives to keep supply tight and prices elevated, and diplomatic requests do not override those incentives when oil revenues fund large portions of their national budgets. The U.S. State Department’s Bureau of Energy Resources leads much of this engagement, working through bodies like the International Energy Agency and the International Energy Forum to advocate for supply stability.13Department of State. FY 2023 Congressional Budget Justification Appendix 1 – Department of State Diplomatic Engagement High-profile presidential outreach to Saudi Arabia and other major producers has occasionally succeeded in boosting output commitments, but compliance by OPEC members often lags behind promises.
Congress has considered more aggressive approaches. The No Oil Producing and Exporting Cartels Act, known as NOPEC, would strip sovereign immunity from OPEC member nations and their state-owned oil companies, allowing the U.S. attorney general to sue them in federal court under antitrust law. Versions of the bill have been introduced for over two decades and have occasionally cleared committee, but the bill has never become law, largely because of concerns about diplomatic retaliation.
Why Combinations Work Better Than Any Single Tool
Each of these mechanisms targets a different piece of the gasoline supply chain, and none controls enough of the picture to guarantee lower prices on its own. An SPR release adds supply but depletes a finite reserve. A tax holiday lowers the sticker price but starves road maintenance funding. Faster permitting boosts future production but takes years to deliver barrels. Diplomatic pressure depends on the willingness of foreign governments whose interests often diverge from ours. Fuel-blend waivers sacrifice air quality for short-term relief.
The most effective responses combine several tools at once: releasing reserves to calm spot markets, waiving blend requirements to stretch existing supply, and signaling to producers that new domestic capacity is coming. What does not work is promising consumers that any single policy will solve the problem, because the global oil market is bigger than any one government’s toolkit.