US diesel prices remain sharply above last year’s levels, prompting President Donald Trump to sign an executive order aimed at reducing fuel costs for farmers, truckers, construction businesses and other diesel-dependent operators. The order directs states to expand access to tax-exempt red-dyed diesel and consider waiving certain fuel taxes.
Trump announced the move during a campaign stop in Grand Island, Nebraska, saying the changes would reduce costs for businesses and help lower the prices of goods and groceries. The executive order also calls for the non-enforcement of certain restrictions governing dyed diesel and directs the Treasury Department to review specific diesel-related taxes.
Red-dyed diesel is exempt from federal and state excise taxes and is commonly used in farming, construction and other industries. The administration said temporarily easing restrictions on its use would reduce operating costs for businesses that rely heavily on diesel-powered vehicles and equipment.
“The typical trucker will save more than $100 every time they fill up,” Trump said while signing the order. He also said farmers would save “millions and millions of dollars” and that the measure would help bring down the cost of goods and groceries. The claims were made as the administration faces pressure over fuel and food prices ahead of the November midterm elections.
According to research firm Clear View Energy Partners, cited by Politico, ten states representing roughly a third of US diesel sales had already taken steps by Friday to allow wider use of dyed diesel. Several states had also waived taxes on diesel used in agricultural vehicles. The new order asks states to increase availability and consider further tax relief.
The measure comes as the average US diesel price fell to $6.32 a gallon on Monday, according to AAA. That was 13 cents lower than the previous week but still $2.63 higher than a year earlier. The source report attributed the rise to disruption in global diesel availability linked to the war involving Iran and attacks by Ukraine on Russian refineries. US diesel exports have also increased to record levels since the US and Israel launched a war with Iran in February and Ukraine began targeting Russian refineries.
The order follows weeks of uncertainty over whether the administration would restrict diesel exports to increase domestic supply. Trump had previously supported an outright export ban, while agriculture-state Republicans, including Iowa Senator Chuck Grassley, pressed for action to reduce costs for farmers. On Friday, however, Trump ruled out a diesel export ban and said he had never seriously considered one after Europe agreed to release fuel from its diesel reserves.
Agriculture Secretary Brooke Rollins said the administration would announce additional short-term relief for farmers in Nebraska and that she would discuss the issue during a visit to Iowa. The immediate implementation of the order will depend on action by individual states and the Treasury Department’s review of diesel-related taxes.
