Trump allows cheaper diesel on highways as fuel costs surge

Key Points:

• President Donald Trump signed an executive order allowing broader use of red-dyed diesel, typically reserved for farm and off-road equipment, to help reduce record-high fuel costs.
• The order temporarily permits truckers and farmers to use this tax-exempt diesel fuel and defers related federal excise taxes through the end of 2026, with potential elimination of the deferred tax obligations.
• Red-dyed diesel is normally illegal for highway use due to tax evasion concerns, but several states have relaxed restrictions amid soaring diesel prices driven by global supply disruptions linked to conflicts in Ukraine and Iran.
• Diesel prices in the U.S. reached a record national average above $6 per gallon in September, increasing transportation costs and daily fuel spending by Americans by approximately $700 million compared to last year.
• The administration cited tight global supply and refining capacity issues as key factors behind rising diesel prices, with the Group of Seven nations agreeing to release 100 million barrels of diesel and crude reserves to ease the situation.