President Donald Trump signed an executive order allowing U.S. drivers to use red-dyed diesel fuel—typically reserved for agricultural machinery and off-road vehicles—on public roads. The order also postpones the excise tax collection, aiming to ease the burden on Americans from soaring diesel prices.
President Donald Trump signed an executive order temporarily permitting the use of red-dyed diesel on public roads and delaying federal excise tax payments for this fuel type on roads until the end of the year, without interest or penalties. The order also calls for studying the possibility of fully abolishing the tax.
Red-dyed diesel fuel is almost identical to regular diesel but is exempt from highway fuel taxes because it is normally used in agricultural machinery, construction equipment, and off-road devices. The red dye helps authorities detect and enforce laws against its use on public roads.
Trump announced this measure during a speech in Nebraska, stating he would remove restrictions limiting red-dyed diesel use to off-road only and allow public purchase. However, the White House summary offered more limited details, focusing more on the tax deferral than immediate tax elimination.
The order directs the U.S. Treasury Department, in coordination with the Department of Defense, to implement the tax deferral. Meanwhile, the Department of Transportation will coordinate with state governments, industry, and labor unions to facilitate access to red-dyed diesel. The Agriculture Department will ensure farmers in high-demand areas can obtain this fuel.
The White House stated that this measure aims to reduce costs for farmers, truck drivers, and workers, claiming truck drivers could save over $100 per fill-up. Federal and state authorities may also exercise discretion to suspend inspections and ease tax burdens related to on-road use of red-dyed diesel.
This move comes amid U.S. diesel prices reaching record highs above $6 per gallon in recent weeks, creating political pressure on Trump's Republican Party ahead of the U.S. midterm elections.
The White House cited the Russia-Ukraine war and insufficient global refining capacity as key causes, blaming Democratic-led state green energy policies that have forced some refineries to close. The White House documents did not mention the Iran war, which Trump linked to rising oil prices during his speech.
Trump also praised an agreement with Europe to release 100 million barrels of refined diesel from the Strategic Petroleum Reserve within four months to increase market supply and push prices down. Previously, he had proposed limiting U.S. diesel exports, a crucial fuel for trucks, agricultural machinery, and construction equipment.
The Trump administration said the energy cost reduction measures are part of its broader U.S. energy production policy, claiming that since returning to office in 2025, the government has provided over $40 billion in aid to farmers, supported truck drivers, and increased domestic oil supply.