WASHINGTON: (News Desk) – US President Donald Trump has signed an executive order aimed at easing the impact of soaring diesel prices by allowing drivers to use tax-exempt red-dyed diesel on public roads.
Red-dyed diesel is generally reserved for farm machinery and other off-road equipment. It is essentially the same fuel as standard diesel but is exempt from federal highway fuel taxes.
Speaking at a rally in Nebraska on Monday, Trump said the order would waive the off-road requirement and allow people to purchase tax-free red-dyed diesel for any purpose.
“I don’t know what the hell it is, but whatever it is, it’s supposed to be very good,” Trump joked while addressing supporters.
However, a White House fact sheet accompanying the order outlined a more limited measure than Trump described at the rally.
Under the order, Treasury Secretary Scott Bessent, in consultation with Defence Secretary Pete Hegseth, has been directed to defer taxes owed on dyed diesel used on public roads until the end of the year without interest or penalties.
The administration will also examine options for eliminating the charges altogether. Federal authorities and state governors may use their discretion to suspend inspections and waive tax liabilities that drivers would otherwise face.
The move comes as rising fuel prices have become a political concern for Trump’s Republican Party, with the US midterm elections approaching.
The White House fact sheet attributed the rise in prices to the Russia-Ukraine war and a global shortage of refining capacity. It also criticised Democratic-led states over refinery closures linked to green-energy policies.
At the Nebraska rally, Trump also praised a deal with Europe to release 100 million barrels of refined diesel from strategic reserves over the next four months.
Trump had previously floated restricting US diesel exports as prices climbed sharply. Diesel, widely used by trucks, farm machinery and construction equipment, has recently surpassed $6 per gallon in parts of the United States.
Export restrictions imposed by Russia following Ukrainian attacks on its fuel infrastructure have also added pressure to global diesel markets.
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