George Bush directed the Environmental Protection Agency to suspend for this summer federal clean-burning gasoline rules that are forcing consumers to buy expensive new gasoline blends.
Bush temporarily halted shipments to the Strategic Petroleum Reserve as a way to get more oil on the market and try to combat prices that have soared above $3 a gallon.
He acknowledged that Americans are in for a tough summer on the road.
"Energy experts predict gas prices are going to remain high throughout the summer. And that's going to be a continued strain on the American people," he told the Renewable Fuels Association, a group advocating expanded use of ethanol as an alternative fuel source.
Bush, his own popularity hitting a new low, is under pressure to do something about soaring gasoline prices in hopes of staving off a potential election-year problem for Republicans trying to hang on to control of the US Congress.
A former Texas oil man, Bush was unusually blunt with oil companies enjoying record profits. He said they should use some of their largesse to invest in new refineries and researching alternative fuel sources.
Gasoline prices have soared
above $3 a gallon in the US
"We expect there to be strong reinvestment to help us with our economic security needs and our national security needs," he said.
He said he wanted Congress to take away from the oil companies about $2 billion in tax breaks over 10 years, such as subsidising research into deepwater drilling. He said the tax breaks are unnecessary at a time of "record oil prices and large cash flows".
"Taxpayers don't need to be paying for certain of these expenses on behalf of the energy companies," Bush said.
Bush said Congress should find a way to approve permits to build new refineries a year after they are filed.
The fact that no new refineries have been built in 30 years is frequently cited as a reason contributing to soaring gas prices.
Democrats were skeptical that Bush was serious about cracking down on his old friends in the oil business.
"When it came to the oil companies, the Bush administration has always 'seen no evil, heard no evil and spoke no evil," said Frank Lautenberg, a Democratic senator.
With gas prices climbing, Democrats hoping to win control of Congress in November have used the issue to slam White House energy policy and Republicans' ties to big oil companies.
Bush's public approval rating has fallen to 32%, a new low for his presidency, according to a CNN poll on Monday.