Trump wants to reduce the cost of fuel as the midterms loom - will it work?

Trump seeks to bring down fuel costs as the midterms approach - can he succeed?

Gasoline and diesel prices have more than doubled since the US-Israel conflict with Iran started in February, hitting transport firms, farmers and anyone who drives in America.

With the crucial midterm elections nearing, pressure has been mounting for stronger action to lower fuel prices, and US President Donald Trump has made a series of remarks and announcements intended to bring costs down.

The key question is what he can actually do with only a few weeks left before election day - and whether it will make any difference.

Trump’s announcement at a campaign stop this week that he would waive the use of red dye diesel highlighted how central gas prices have become in a midterm contest dominated by affordability concerns.

The election is taking place amid broad public anxiety about rising fuel, food and other costs. Voters have linked the problem to Trump and his party, putting Republicans running in November under pressure.

Polls indicate that most Americans disapprove of Trump’s handling of the economy and the war in Iran, both of which have helped drive up diesel and gas prices in the US.

Since the conflict in the Middle East effectively stopped the normal movement of oil and refined products through the Strait of Hormuz for months, global oil supplies have been constrained.

Although crude oil flows are now almost back to pre-war levels, the price remains above $100 a barrel, and persistently high oil prices have fed through to diesel and gasoline.

David Ruisard, pricing manager at commodities intelligence firm Argus, says the continuing Russian war with Ukraine has also affected oil supplies, adding to fuel costs.

"Our estimates are that your price increase from about $3 a gallon up to $6 a gallon [for diesel] is 60% connected to the Strait of Hormuz, 40% connected to the Russia-Ukraine conflict," he says.

Oxford Economics chief US economist Michael Pearce says those higher energy prices account for most of this year’s rise in inflation, which is also pushing up interest rates.

"The combined impact of higher rates and higher energy prices is squeezing household budgets and adding to firms' costs," he says.

Even though prices are still elevated, Patrick De Haan, head of petroleum analysis at fuel price tracking site GasBuddy, said there have been slight recent declines in both gasoline and diesel.

"A lot of that is likely due to some of the manoeuvres that we've seen the Trump administration employ over the last couple of weeks," he said.

This week, the president said he would permit so-called red dye diesel - fuel used off-road and exempt from federal taxes - to be used on US highways without federal levies.

Ruisard said the only distinction between the diesel used by truck drivers and ordinary consumers and the tax-free red dye diesel is the dye itself.

"The problem with that red dye is, it's extremely hard to clean it out of your tank," he explained.

He said the issue this creates is what happens to trucking companies that use the dyed diesel once the temporary tax relief ends.

"The fines are pretty high for having that in your fuel tank because its considered tax evasion."

According to Ruisard, another concern with widening the use of red dye diesel is that people and businesses - including rail operators - typically reserve a set amount of the product.

"If suddenly people go out and they start consuming that diesel, that depletes their available supply as well," he said.

But analysts say another Trump move has been more effective.

Last week, the G7 countries said they would release 100 million barrels of oil and diesel from stockpiles to ease supply worries, after pressure from Trump to do so.

De Haan says the announcement itself - regardless of how much has actually been released so far - "has worked to push prices down to some degree".

Pearce agreed, but cautioned that the release is only a short-term fix.

"As long as energy exports from the Gulf remain disrupted, stocks will need to be drained further to supply the market," he said. "And the need to refill those stocks will mean energy prices remain elevated for a period, even when disruption in the Middle East clears."

Earlier this week, Trump said he was "thinking about" suspending the federal tax on gasoline.

De Haan said the president has also been urging states to cut state gasoline taxes, and several have done so, including Ohio and Georgia.

State taxes make up a "moderate portion" of what consumers pay at the pump, and those cuts have helped lower prices and national averages, he said.

However, suspending or reducing the federal gasoline levy would require Congress to cooperate.

"That may be difficult to obtain ahead of the midterm elections," said De Haan.

It is also an expensive step.

De Haan estimated that in Indiana, which cut its gasoline tax in May, the move has cost the state government $1bn (£760m) in lost revenue.

Trump has also previously backed calls for a ban on diesel exports from the US.

Pearce said that would offer partial relief in the Gulf and Midwest, but would be of "little benefit" to the Northeast and West Coast.

"The policy risks backfiring because it would result in stockpiling of diesel, and as that storage runs out, refineries would need to cut back on production," he said.

"That would raise prices of other energy products, including gasoline."

De Haan said the president has "basically pulled all of the small levers that a president can pull, and we're still seeing prices very elevated".

"The only way out of this to reduce gas prices in a meaningful way is solve one or both of the geopolitical tensions that are causing high prices," he said.

That would mean reaching a deal with Iran and helping secure an agreement between Ukraine and Russia - issues Pearce said cannot be directly controlled by the White House.

Even if those conflicts end, Ruisard said damage to facilities in the Middle East caused by military strikes means production would still take four to six months to return to normal.

"The message to consumers and industry is that regardless of what happens and whether the president is able to successfully negotiate that kind of a deal," he said.

"High prices are here to stay for a little while at least."