U.S. President Donald Trump shows the crowd the executive order he just signed during a campaign rally at the Pinnacle Bank Expo Center in Grand Island, Nebraska, on October 5, 2026.
Kent Nishimura | AFP | Getty Images
President Donald Trump has authorized broader use of cheap, red-dyed diesel normally reserved for farm work in an effort to bring down record fuel costs.
President Trump signed an executive order Monday night that temporarily allows truckers and farmers to use red-dyed diesel, which is exempt from highway fuel taxes, and defers related taxes on the fuel until the end of the year.
Duty-free diesel is typically used in farm equipment, construction equipment, trucks, and other off-road vehicles. Therefore, it is exempt from the 24.4 cents per gallon tax that applies to diesel fuel sold for highway transportation.
Using colored diesel in vehicles on public roads is considered illegal and can result in fines for tax evasion. But to help Americans cope with rising fuel prices, several states eased regulations on tax-free diesel this year.
A truck parked at a diesel fuel pump with prices exceeding $8 per gallon at a truck stop in the Wilmington area of Los Angeles, California, on September 22, 2026.
Patrick T. Fallon | AFP | Getty Images
The national average price of diesel in the U.S. exceeded $6 a gallon for the first time in September, as fuel supply disruptions caused by the conflict between Ukraine and Iran raised transportation costs across the country. Rapidan Energy President Bob McNally says Americans are spending about $700 million more per day on gasoline and diesel than they did a year ago.
The White House said truck drivers could save more than $100 on every fuel stop.
The order also directs the Secretary of the Treasury, in consultation with the Department of the Army, to defer the collection of federal excise taxes on highway diesel without interest or penalties until the end of 2026, according to a fact sheet released by the White House. The Treasury Department is also directed to “explore avenues to completely eliminate the obligation to pay deferred taxes.”
The Trump administration has pointed to the global supply crunch and lack of refining capacity resulting from the Ukraine war as pushing up diesel prices and household costs. The G7 countries also agreed to release 100 million barrels of diesel and crude oil reserves under pressure from President Donald Trump, who imposed a ban on fuel exports from the United States.
