Trump Allows Red-Dyed Diesel on US Highways Through Year-End
President Donald Trump signed an order allowing red dye diesel, normally restricted to off-road use, on highways through the end of the year. The measure defers federal excise taxes and urges states to suspend inspections and taxes. It follows a sharp rise in diesel prices, but the fuel is scarce at ordinary stations and savings may not reach consumers directly.
Rising fuel bills are squeezing US truckers and farmers. President Donald Trump signed an order late Monday in Nebraska allowing red dye diesel, normally restricted to off-road vehicles, to be used on highways through the end of the year.
The measure defers the federal excise tax on the fuel and urges states to suspend related taxes and inspections. It is intended to ease transport costs as the national average diesel price reached $6.32 a gallon, though most ordinary gas stations do not sell red-dyed fuel.
Red dye diesel is regular diesel marked with red dye to distinguish it from taxed fuel for road use. Farmers commonly use it in tractors, while construction equipment and other off-road vehicles also rely on it.
Tax relief may not reach the pump directly
The federal highway tax on diesel is normally 24.4 cents per gallon. The order instructs officials to defer that tax and waive penalties for highway use through the end of the year. The obligations are deferred, not automatically erased; the administration is directed to explore ways to eliminate them, including through legislation.
The order also encourages states to halt inspections and suspend taxes on red-dyed diesel used on roads. CNN reported that 10 states took steps to expand access between September 23 and October 2. Those states account for about a third of diesel sales, according to research firm ClearView Energy Partners, cited.
Consumers may see little immediate change at fuel stations. Most do not stock the dyed fuel, and the administration’s measure focuses on reducing costs for farmers and truckers. Any benefit to shoppers would more likely come indirectly if lower transport expenses ease the cost of moving groceries and other goods.
The price surge has followed shipping disruption in the Strait of Hormuz and attacks on Middle Eastern refineries after US-Israeli strikes on Iran. Ukrainian attacks on Russian refineries and China’s export restrictions have also added pressure to diesel markets.
AAA data cited put diesel at a record $6.53 a gallon on September 22, up from $3.76 before the Iran war. The national average stood at $6.32 on Tuesday. Time reported the same average on Monday.
Trump presented the order at a campaign event in Nebraska and said it would reduce costs across the economy. “This order will also drive down the costs of all goods, including groceries,” he said.
Truckers face questions over savings
The potential relief is limited by access and the patchwork of state rules. Truckers cross state lines, and permission to use the fuel does not guarantee they can find it or receive the full tax benefit.
“It’s a Band-Aid,” John Tirado, who runs a trucking company in New Jersey and leads fuel supplier Summa Energy, said. He said prices had been climbing since March and that the measure would help with the next fuel bill, not earlier costs.
Patrick De Haan, head of petroleum analysis at GasBuddy, said the change was “not really a needle-mover.” He also warned that implementation would be difficult as truckers travel across state lines.
Time estimated that waiving federal taxes would save a trucker about $60 on a 250-gallon fill-up. CNN reported a possible reduction of about $150 if both federal and state taxes were waived. The order’s temporary waiver runs through the end of the year.
