• Waiver could expire on August 16 after nearly 200 uses through end-July, US government data shows
  • Officials discuss narrowing waiver's scope while preserving flexibility for critical fuel supplies, sources say
  • No final decision has been made and details remain subject to change, sources say

WASHINGTON/HOUSTON, Aug 4 (Reuters) - The White House is expected to extend a waiver of the century-old Jones Act in the coming days, sources say, reaching for one of the few tools it has to try and hold down gasoline prices as President Donald Trump escalates his attacks on Exxon Mobil XOM.N and Chevron CVX.N for making "too much money."

The Jones Act requires cargo moving between U.S. ports to be carried on ships built in the U.S., owned by U.S. companies and crewed by American workers, and the waiver aims to lower gas prices by increasing shipping flexibility and reducing transport bottlenecks.

The oil industry had expected an extension by the end of July. But administration officials have continued meeting with maritime industry representatives and lawmakers over potential changes to narrow the scope of the waiver while preserving flexibility to move critical fuel supplies, according to three people familiar with the discussions who requested anonymity because they are not authorized to speak publicly.

The current waiver is set to expire on August 16 and has already become the longest suspension of the Jones Act rules in the program’s history. The exemption has been used nearly 200 times over four and a half months through the end of July, according to U.S. government data.

Trump is running out of easy options to lower gasoline prices — currently averaging over $4 a gallon in the U.S. — ahead of the midterm elections in November. The administration has already leaned on measures including increased oil supply efforts and regulatory flexibility, while Trump on Monday escalated rhetorical pressure on Exxon and Chevron by saying they should return money to consumers at the pump.

Bob McNally, president of Rapidan Energy Group, said the most effective option for any U.S. president would be to press Saudi Arabia to increase oil production - an option not feasible because exports remain constrained by disruptions around the Strait of Hormuz amid the Iran conflict.

Other potential measures, including a windfall profits tax, gasoline price controls or legal action against oil companies, are either politically unrealistic, economically risky or unlikely to meaningfully reduce prices, McNally said.

McNally said the Jones Act waiver increases the availability of tankers to move fuel but would probably reduce gasoline prices by only pennies per gallon.