Trump administration to cut US fuel economy standards as petrol prices climb

The Trump administration is set to unveil new fuel economy standards on Monday that will relax the rules requiring US carmakers to make petrol-powered cars and light trucks more efficient, a move that comes as Americans pay more at the pump because of the war with Iran.

Transportation Secretary Sean Duffy announced the timing on X at the weekend. President Donald Trump wrote on his Truth Social platform that the less demanding mileage rules would “take the waste out of building cars in America”, save families “thousands on a new, beautiful and safe car” and boost US car production.

What changes

Fuel economy requirements set how far, on average, a carmaker’s new vehicles must travel on a gallon of petrol. The rules, known as the Corporate Average Fuel Economy (CAFE) standards, have been in place since the energy crisis of the 1970s.

Last December, the National Highway Traffic Safety Administration (NHTSA) projected that the new standards would set the industry-wide average for light-duty vehicles at about 34.5 miles per gallon in the 2031 model year. Under the rules introduced by President Joe Biden’s administration, that figure would have been about 50.4 miles per gallon.

2031 fleet average	Miles per gallon
Biden-era rules	About 50.4
Trump administration’s new rules	About 34.5

Part of a wider rollback

The change fulfils another of Trump’s promises to scrap policies that encouraged electric vehicles. Since returning to office, he has relaxed tailpipe emissions rules, repealed fines for carmakers that miss mileage targets and ended consumer tax credits of up to $7,500 for buying electric cars.

Trump has repeatedly promised to end what he calls an EV “mandate”, a reference to the Biden administration’s goal of half of all new car sales being electric by 2030. No federal policy has ever required carmakers to sell electric vehicles. Electric cars made up 6.5 per cent of new vehicle sales in February, down from 7.4 per cent across 2025, according to the research group Edmunds.

The administration and carmakers say the new rules will give Americans access to the full range of petrol vehicles they need and can afford. The average new car sold in the US cost $50,089 in August, according to Kelley Blue Book.

Critics: ‘the worst possible time’

The timing has drawn criticism because fuel is getting more expensive. The national average price of petrol was $4.47 a gallon on Sunday, up from $4.09 a month earlier, according to the AAA motor club, as the war with Iran disrupts global fuel supplies.

“Trump is tanking sensible mile per gallon standards at the worst possible time for consumers, who are getting hit with sky-high prices at the pump,” said Dan Becker of the Center for Biological Diversity. Katherine Garcia of the Sierra Club said her group would fight the rule, arguing that “less fuel-efficient cars mean more gas burned, spending more at the pump, and dirtier air in our communities”.

When the Biden-era standards took effect in 2024, NHTSA estimated they would save 14 billion gallons of petrol by 2050, and said savings at the pump over a vehicle’s life would more than cover its higher upfront price.

Why it matters for the world

The United States is one of the world’s biggest consumers of oil, so its fuel rules affect global demand, prices and emissions. Weaker standards mean more petrol burned at a time when the war around the Strait of Hormuz has already squeezed supplies and pushed up prices worldwide, including in Pakistan, where the oil shock is feeding inflation. Airlines around the world are also warning that fares will stay high.

Why it matters

The decision sets up a clear clash between cheaper cars today and higher fuel bills and pollution tomorrow. With petrol prices rising and environmental groups promising to challenge the rule, the debate over America’s fuel standards is far from over.

This article draws on reporting by The Associated Press.