Trump signs order opening tax-free red-dyed diesel to all buyers

US President Donald Trump signed an executive order on Monday waiving restrictions on tax-exempt red-dyed diesel, allowing anyone to buy the fuel for any use through the end of the year, in his latest bid to bring down fuel costs weeks before the November 3 midterm elections (https://www.reuters.com/business/energy/trump-signs-order-expand-access-tax-exempt-diesel-2026-10-06/).

Trump signed the order on stage during a rally in Grand Island, Nebraska, after White House aide Natalie Harp carried it to the podium; he then tossed the Sharpie into the cheering crowd (https://www.usatoday.com/story/news/politics/2026/10/05/trump-tax-free-diesel-fuel-order/92110830007/). “So tonight, I’m going to sign a historic executive order to officially waive the off-road requirement and allow anyone to purchase tax-free, red-dye diesel for any reason,” he told supporters (https://nypost.com/2026/10/05/us-news/trump-signs-executive-order-mid-rally-allowing-drivers-to-use-tax-free-red-dye-diesel/).

The White House order directs the treasury secretary, in consultation with the Pentagon chief, to defer the federal excise tax on on-road use of dyed diesel for the rest of the year without interest or penalties, and to explore eliminating the deferred obligation; it also tasks the agriculture secretary with ensuring farmers’ access in high-demand areas (https://wncy.com/2026/10/05/trump-to-issue-order-expanding-access-to-tax-exempt-diesel-fuel-sources-say/).

Trump claimed the average trucker would save more than $100 per fill-up and that farmers would save “millions and millions of dollars,” adding the move would drive down the cost of all goods “very substantially” (https://nypost.com/2026/10/05/us-news/trump-signs-executive-order-mid-rally-allowing-drivers-to-use-tax-free-red-dye-diesel/).

Diesel averaged $6.32 a gallon on October 5, after first topping $6 on September 11, according to AAA, with prices driven up by the US-Israeli war on Iran and Ukrainian strikes on Russian refineries (https://www.usatoday.com/story/news/politics/2026/10/05/trump-tax-free-diesel-fuel-order/92110830007/). The federal excise tax on diesel is 24.3 cents a gallon and state taxes average 35.5 cents, according to the US Energy Information Administration (https://www.usatoday.com/story/news/politics/2026/10/05/trump-tax-free-diesel-fuel-order/92110830007/). But analysts were sceptical: GasBuddy’s Patrick De Haan wrote on X, “Taxes aren’t the problem, supply is,” noting the order would not help farmers, who already use red-dyed diesel (https://www.cnbctv18.com/world/us-president-signs-order-on-tax-free-red-diesel-says-truckers-can-save-100-per-fill-up-20005364.htm).