President Donald Trump on Monday night signed an executive order temporarily easing restrictions on red-dyed “off-road” diesel, directing that it be made available for highway use and that its federal excise tax be deferred as he attempts to lower surging diesel prices.
The order directs the secretaries of the Treasury, Transportation and Agriculture to expand access to dyed diesel, which is regular diesel fuel dyed red to indicate it is exempt from federal highway fuel taxes and is generally restricted to off-road uses, such as farming, construction equipment and heating, from Monday through Dec. 31.
It also directs the Treasury to defer the federal excise tax that would normally become due when dyed diesel is used in highway vehicles and to explore ways to eliminate the obligation to pay the tax when due. The repayment date was not stated.
A White House fact sheet claims that American truckers will save more than $100 per tank.
Trump announced the executive order during a rally for Republican Sen. Peter Ricketts in Grand Island, Neb., calling it “historic.” Natalie Harp, Trump’s special executive assistant, brought him the document, which he then signed at the lectern as the crowd cheered.
Trump signed the executive order as diesel prices have soared in the United States amid a global supply shortage worsened by the U.S. war against Iran and the years-long war between Ukraine and Russia.
According to the U.S. Energy Information Administration, on-highway diesel fuel costs $6.38 as of late September, up $2.62 from a year earlier.
Trump has blamed the cost of diesel on Ukraine, which has for years attacked Russian refineries to squeeze the Kremlin’s energy revenue that funds the war. Last month, Trump said he told President Volodymyr Zelensky of Ukraine to stop attacking Russia’s diesel-fuel-producing refineries, stating “he’s causing a shortage of diesel fuel.”
On his Truth Social account earlier Monday, Trump claimed that the Strait of Hormuz, a vital energy route that has been restricted by Iran, was “no longer” driving high gas prices, instead blaming Ukraine for attacking Russia’s refineries and claiming Democratic-led states were closing theirs.
Several Republicans were quick to celebrate Trump’s executive order online. Rep. Jason Smith of Missouri called it “a much-needed step to lessen the burden that increased fuel prices have had on farmers, ranchers and the entire agricultural community,” and Louisiana Gov. Jeff Landry said it was “a HUGE WIN.”