Trump Opens Highways to Tax-Deferred Dyed Diesel Through Year-End as Fuel Costs Bite

GRAND ISLAND, Neb., Oct. 5 (TodayViralUSA) — President Donald Trump on Monday signed an executive order temporarily allowing untaxed, red-dyed diesel fuel to be used in highway vehicles through the end of the year, a measure the White House says will lower costs for truckers, farmers and consumers as diesel prices remain elevated after the war with Iran.

Trump signed the order on stage at a campaign rally in Grand Island, Nebraska, four weeks before the Nov. 3 midterm elections. “The typical trucker will save more than $100 every time they fill up,” he told the crowd, adding that farmers would save “millions and millions of dollars” and that the move would help bring down grocery prices, according to the Associated Press.

What the order does

Diesel in the United States is taxed according to how it is used. Fuel burned on public roads is subject to federal and state excise taxes, while fuel for off-road purposes such as farming, construction and heating is exempt and is dyed red so that authorities can spot misuse. The federal excise tax on highway diesel is 24.4 cents a gallon.

The order directs the Treasury secretary, in consultation with the secretary of war, to defer payment of the federal excise tax owed on dyed diesel used on highways for the rest of the year without interest or penalties, and to explore ways to eliminate the deferred liability altogether, according to the text published by the White House.

It also instructs the Internal Revenue Service to announce within five days that it will not impose penalties when dyed diesel is sold for or used on highways between Oct. 5 and Dec. 31, 2026. The Transportation Department is to coordinate with states, industry and labor groups on access to the fuel, and the Agriculture Department is tasked with ensuring farmers can obtain dyed diesel in high-demand areas.

States hold the other half

Because state fuel taxes and enforcement are outside Washington’s control, the order directs the White House Office of Intergovernmental Affairs to encourage more states to adopt matching policies. The White House fact sheet said both the administration and governors can use enforcement discretion to pause inspections and waive tax liability for on-road use.

Nebraska has already moved in that direction. An executive order issued by Governor Jim Pillen on Sept. 24 allows dyed diesel in highway vehicles hauling Nebraska-sourced agricultural products through Dec. 23, and offers refunds of state fuel tax paid on undyed diesel used for that purpose. The state’s Department of Revenue said that relief covered only state penalties and that it had asked the IRS for matching federal relief.

Politics of prices

Rising fuel and grocery costs have weighed on voters and on Republican candidates, the AP reported. Trump used the signing to promote Senator Pete Ricketts, who faces independent Dan Osborn, and Pillen, who is seeking a second term. “Pete and Jim, this should absolutely ensure your election, I guarantee you that,” the president said.

Not every policy has been welcomed in the farm state. Ricketts told the AP that an administration plan to allow more imports of foreign beef was “not helping Nebraska ranchers” and urged the White House to change course in favor of longer-term steps to rebuild the cattle herd.