U.S. President Donald Trump shows the crowd an executive order he just signed during a campaign rally at the Pinnacle Bank Expo Center in Grand Island, Nebraska, October 5, 2026.
Kent Nishimura | Afp | Getty Images
President Donald Trump has authorized the broader use of cheaper red diesel, typically reserved for farms, in an effort to reduce fuel costs, which are at record levels.
Trump signed an executive order in the United States on Monday evening temporarily allowing truckers and farmers to use red-tinted diesel – which is exempt from taxes on highway fuels – and deferred related taxes on the fuel until the end of this year.
Duty-free diesel is typically used by agricultural equipment, construction equipment, trucks and other off-road vehicles. It is therefore exempt from a tax of 24.4 cents per gallon applied to diesel fuel sold for road transportation.
The use of tinted diesel in vehicles on public roads is considered illegal and could result in fines for tax evasion. But several states have eased restrictions on tax-exempt diesel this year to help Americans cope with soaring fuel prices.
A truck parks in front of a diesel fuel pump with prices above $8 per gallon at a truck stop in the Wilmington neighborhood of Los Angeles, California, September 22, 2026.
Patrick T. Fallon | Afp | Getty Images
The national average price of diesel in the United States topped $6 a gallon in September for the first time, as fuel supply disruptions triggered by conflicts in Ukraine and Iran drove up transportation costs across the country. Americans are spending about $700 million more per day on gasoline and diesel than they were a year ago, according to Bob McNally, president of Rapidan Energy.
The White House said truckers could save more than $100 per fill-up.
The order also directs the Secretary of the Treasury, in consultation with the Department of Defense, to defer collection of the federal excise tax on highway diesel until the end of 2026, without interest or penalties, according to a fact sheet released by the White House. The Treasury is also tasked with “exploring avenues to completely eliminate the requirement to pay deferred taxes.”
The Trump administration has cited tight global supplies linked to the war in Ukraine and a lack of refining capacity as causes for rising diesel prices and household costs. The Group of Seven also agreed to release 100 million barrels of diesel and crude reserves, under pressure from Trump who launched a ban on US fuel exports.
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