President Trump signed an executive order aimed at reducing the surging cost of diesel fuel, framing the move as historic relief for American consumers and industries.
“I’m going to sign a historic executive order to officially waive the off-road requirement, and allow anyone to purchase tax-free red dyed diesel for any reason,” Trump said before calling on aide Natalie Harp to bring the order on stage for him to sign.
Trump signed the order at a campaign rally in Nebraska held in support of Sen. Pete Ricketts and Gov. Jim Pillen, both Republicans.
Ricketts’ reelection bid has grown increasingly competitive in recent weeks, adding political urgency to the president’s appearance in the state.
“So Pete and Jim, this should absolutely assure your election,” Trump told the crowd gathered at the rally.
The administration also announced that the Treasury Department would conduct a review of diesel taxes as part of the broader effort to bring down fuel costs.
According to a White House fact sheet, the order will “temporarily allow off-road ‘dyed’ diesel for highway use and defer the applicable Federal excise tax, lowering costs for Americans.”
The order directs the Treasury secretary, working with the secretary of defense, to defer payment for on-road dyed diesel use through the end of the year without interest or penalties, and to “explore pathways to eliminate the obligation to pay the deferred taxes.”
Diesel prices have climbed sharply, with the national average reaching approximately $6.32 per gallon as of Monday, according to AAA, putting significant pressure on agriculture and trucking industries.
Prices surged from $3.76 a gallon before the Iran war to a record of $6.53 a gallon on September 22, according to AAA data, representing a dramatic run-up that alarmed businesses reliant on the fuel.
Under normal circumstances, on-road diesel is taxed at 24.4 cents per gallon at the federal level, while state taxes average an additional 35.5 cents per gallon, according to federal data.
The White House said the order also instructs administration officials to encourage more states to adopt similar policies and to ensure farmers have access to dyed diesel in high-demand areas.
Tom Kloza, chief oil analyst at Gulf Oil, expressed skepticism about the order’s practical impact on overall diesel prices, telling The Hill, “This is really a cosmetic gesture.”
Kloza added bluntly, “This really is a Band-Aid where a tourniquet would be more appropriate,” suggesting the measure falls far short of what is needed to address the underlying supply problem.
He emphasized that the quantity of diesel released would not be enough to supplant the barrels lost due to Ukraine targeting Russian oil refineries amid the ongoing Russia-Ukraine war.
