President Trump has signed an executive order permitting the use of red-dyed diesel, typically reserved for agricultural and off-road use, to be utilized more widely by truckers and farmers. This diesel is exempt from the 24.4 cent-per-gallon federal highway fuel tax, which could lead to savings of over $100 per fill-up for truckers.
The U.S. national average price for diesel surpassed $6 a gallon in September, driven by supply disruptions linked to the conflicts in Ukraine and Iran. Americans are currently spending approximately $700 million more daily on fuel compared to last year.
The order also instructs the Treasury Secretary to defer the collection of federal excise taxes on highway diesel until the end of 2026 and to explore options for eliminating these deferred taxes entirely.
This initiative comes as the Group of Seven nations agreed to release 100 million barrels of diesel and crude reserves, responding to the pressure from Trump, who had previously considered banning U.S. exports of fuel.
The administration attributes the rising diesel prices to tight global supply and limited refining capacity, which are critical factors affecting household costs and the broader economy