Trump Taps Defense Production Act for $150M Fuel Output Push
President Trump will invoke the Defense Production Act to direct $150 million toward U.S. gasoline and diesel output; experts doubt near-term price relief.
The story in focus
President Trump said his administration will invoke the Defense Production Act to spend $150 million boosting U.S. gasoline and diesel production after meeting refiners, CBS News reported. The Energy Department said the funding will raise refining output and lower fuel prices; experts told CBS that U.S. refining has no spare capacity and near-term impact is unlikely.
- Trump announced the DPA funding after a White House meeting with refiners, a White House official told CBS News.
- The Energy Department said the $150 million will increase U.S. refining output by millions of gallons per day and lower fuel prices.
- GasBuddy's Patrick De Haan and Gulf Oil's Tom Kloza told CBS the measure is unlikely to have near-term impact, citing no slack in U.S. refining.
What was announced
President Trump said Thursday his administration will invoke the Defense Production Act to spend $150 million to boost U.S. gasoline and diesel production, CBS News reported. The announcement followed a White House meeting with refiners on steps to bring more capacity online, a White House official told CBS News. The DPA is a Korean War-era law allowing the president to use loans, purchase commitments and other mechanisms to incentivize production of critical goods.
In a Thursday press release, the Department of Energy said the funding will increase U.S. refining output by millions of gallons per day and lower fuel prices. The White House official said the funds will help expand capacity and modernize existing infrastructure, which is faster than building a new refinery.
Market context
The push comes as crude oil prices climbed to their highest level since May. On Friday, Brent crude was $116 a barrel, up 2.6%, while West Texas Intermediate was around $103, up 3%. AAA put the national average at $4.29 a gallon for gasoline and $6.32 for diesel, jumps of 40% and 74% from a year earlier. The U.S. produces more fuel than it consumes, but oil prices are set on the global market, where the Iran war and Russia-Ukraine conflict have disrupted shipments.
Expert skepticism
Experts told CBS News the DPA move is unlikely to lower fuel prices much. Patrick De Haan of GasBuddy said he did not think it would have any impact. Tom Kloza, chief energy adviser for Gulf Oil, said DPA funds could speed some refining expansions but that any short-term benefits are unlikely.
Kloza said there is no slack in U.S. refining, so production cannot be added regardless of political will, and that it typically takes months and calendar quarters to bring units back to service. The American Fuel & Petrochemical Manufacturers said the country's 128 operating refineries produce more fuel than the U.S. consumes and are running all-out.
Why do experts doubt the Defense Production Act funding will lower fuel prices soon?
Gulf Oil's Tom Kloza told CBS there is no slack in U.S. refining, so output cannot be added regardless of political will, and units take months and quarters to return to service.
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