White House and Retailers Clash Over Gas Price Volatility as Discounted Stations Report Surge in Sales

The White House has announced the launch of the first “Freedom Fuel” gas station in Philadelphia, which offers gasoline at approximately 50 cents below the Pennsylvania state average. As global oil prices fluctuate due to tensions between the United States and Iran, a debate has emerged regarding why retail gasoline prices remain near $4 per gallon rather than dropping to the $3 range.

The cost of gasoline is influenced by several factors, including the price of a barrel of crude oil, refinery costs, state and local taxes, environmental maintenance, and credit card processing fees.

Jarrod Agen, executive director of the National Energy Dominance Council, stated that the administration believes gas stations have room to further reduce prices. He noted that President Donald Trump monitors national fuel prices closely.

“Gasoline profit margins at the pump have increased significantly since the COVID-19 pandemic,” Agen remarked. “They have become somewhat excessive. While this is traditionally a low-margin industry, I believe some have utilized the conflict with Iran as a justification to expand their margins.”

A man pumps gas at a Valero gas station on June 25, 2026 in Austin, Texas. (Brandon Bell/Getty Images / Getty Images)

Agen cited the Freedom Fuel Network, which operates 25 stations throughout Philadelphia and New Jersey, as a successful model. The company implemented deep discounts despite lower profit margins. According to Agen, company executives indicated that selling at wholesale prices plus minimal operating costs allows for savings of roughly 50 cents per gallon, a strategy intended to drive consumer traffic and encourage market-wide price reductions.

Agen noted that the Freedom Fuel stations are successfully compensating for lower margins through increased sales volume.

President Donald Trump stands next to a bell before ringing it to open the New York Stock Exchange ahead of the launch of Trump investment accounts in the Oval Office. (Mandel AND / AFP / Getty Images)

In an exclusive report, a White House official revealed that the Freedom Fuel network experienced a 51.3% increase in fuel volume in July following their July 3 discount launch. Data suggests this move prompted 320 stations within a 40-mile radius to reduce prices by 10 cents per gallon. The official added that a ripple effect led approximately 600 stations to lower prices, benefiting motorists across the Philadelphia and New Jersey regions.

National organizations representing smaller retailers have contested the administration’s claims regarding increased margins. Jeff Lenard, Vice President of the National Association of Convenience Stores, attributed margin compression to credit card processing fees.

“Approximately 90% of the cost of a gallon of gas is determined before the retailer even receives the fuel. After accounting for expenses—specifically credit card fees—retailers typically see only about a 5% pre-tax profit on the fuel sold,” Lenard stated in a communication to FOX Business.

He further noted that these profit margins have remained historically consistent. Rob Underwood, President of the Energy Marketers of America, echoed these sentiments.

“Fuel marketers are small businesses operating on thin margins in a transparent and highly competitive market. While crude oil prices are set globally, pump prices are determined locally,” Underwood said. “Regardless of market shifts, credit card companies earn a profit on every gallon through percentage-based interchange fees—often collecting more per gallon than the retailer nets—while they do not share in the fuel costs or environmental compliance burdens.”

Senior White House officials maintain that Trump administration policies, such as temporarily waiving the Jones Act, invoking the Defense Production Act, allowing California to produce its own oil, and granting EPA waivers, have worked to mitigate price increases. Agen expressed confidence that gasoline prices will soon align with falling oil prices.

“There is no reason for prices to spike rapidly but decline so slowly,” Agen said. “We want them to decrease as quickly as they rose.”

Underwood explained that the lag in price drops is a structural reality: “Retail prices are already declining in response to lower crude oil prices, but there is typically a two-to-three-week lag as retailers sell through higher-cost inventory. Competition eventually forces these savings to the consumer as stock turns over.”

According to AAA, gas prices have decreased by more than 6% over the past month.

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