Trump Moves to Cut US Diesel Costs With Tax-Free Fuel Order

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Washington: On October 5, US President Donald Trump signed an executive order expanding access to tax-exempt diesel, as his administration works to mitigate the impact of dramatically increased fuel prices on truckers, farmers, and other diesel users.

The ruling temporarily allows red-dyed diesel, which is often reserved for off-road applications such as agriculture and construction, to be used on roadways. It also defers the federal diesel fuel tax on such use until the end of 2026, with no interest or penalties.
The decision comes as US diesel prices have risen to record highs, approaching $6.50 per gallon due to interruptions in global energy supplies.

According to the administration, cutting gasoline prices might gradually lower the cost of goods by lowering transportation and agricultural costs.

Since red-dyed diesel is already widely accessible for tax-exempt off-road activities and increasing its highway use does not increase overall fuel supplies, commentators have questioned how much the action will lower costs. Additionally, the order is only temporary; the tax deferment is scheduled to expire on December 31.