Trump Permits Cheaper Red-Dyed Diesel on Highways as Midterm Elections Near, Aiming to Curb Record Fuel Price Surge

Deep News
10/06

Under the backdrop of soaring fuel prices, Trump has approved expanding the use of a special diesel originally designated solely for farm and construction site use.

In September, the U.S. national average diesel price exceeded $6 per gallon for the first time in history.

The White House stated that due to the war in Ukraine and insufficient global refining capacity, diesel prices have risen, driving up household living costs.

On September 22, 2026, at a truck stop in the Wilmington neighborhood of Los Angeles, California, a truck was parked next to a diesel pump displaying a price above $8 per gallon.

The Trump administration is allowing the use of cheaper red-dyed diesel 鈥?a fuel typically restricted to agricultural operations 鈥?hoping to bring down record-high fuel costs.

On Monday evening U.S. local time, Trump signed an executive order temporarily permitting truck drivers and farmers to use red-dyed diesel; the fuel was originally exempt from highway fuel taxes, and the executive order defers the payment deadline for the relevant taxes until the end of this year.

This tax-exempt diesel is generally used for agricultural equipment, construction machinery, trucks, and other off-road vehicles, and is therefore exempt from the 24.4 cents per gallon federal diesel excise tax for highway transportation.

Under the original regulations, vehicles traveling on public roads using red-dyed diesel were in violation of the law, and users faced tax evasion-related fines.

However, this year multiple states have relaxed restrictions on the use of this tax-exempt diesel to help people cope with soaring fuel prices.

Affected by fuel supply disruptions caused by the conflicts in Ukraine and Iran, transportation costs across the United States have risen, and in September the U.S. national average domestic diesel price exceeded $6 per gallon for the first time in history.

Bob McNally, president of energy consulting firm Rapidan Energy Group, said Americans are spending about $700 million more per day on gasoline and diesel combined compared with the same period last year.

The White House says truck drivers will be able to save on fuel expenses.

According to a White House fact sheet, the executive order also directs the Treasury Secretary to consult with the Department of War (formerly the Department of Defense) to defer the federal excise tax corresponding to red-dyed diesel used on highways until the end of 2026, without interest or penalties.

The Treasury Department has also been asked to study feasible options for completely waiving this deferred tax.

The Trump administration stated that global supply tightness brought about by the war in Ukraine, combined with insufficient refining capacity, together pushed up diesel prices and residents' living costs.

After pressure from the United States, the G7 also discussed releasing strategic reserves of diesel and crude oil; Trump had previously floated the idea of considering a ban on U.S. fuel exports.

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