President Donald Trump will allow road vehicles to use untaxed diesel typically used in farm operations as part of an effort to ease rising fuel costs. Trump signed an executive order on Monday to temporarily allow anyone to pump so-called red-dyed diesel, which is normally not allowed in road vehicles. I don’t know what the hell it is, but whatever it is, it is supposed to be very good,” Trump said at a campaign rally in Grand Island, Neb., in support of Republican Sen.
The order would “officially waive the off-road requirement and allow anyone to purchase tax-free, red-dyed diesel for any reason,” he said. Fuel prices have soared across the country since Iran disrupted shipping through the Strait of Hormuz and attacked Middle Eastern refineries in retaliation for U.S.-Israeli strikes on Feb. 28. Average diesel prices in the U.S. hit $6.32 a gallon on Monday, according to AAA.
That’s up from $3.76 a gallon before the U.S. and Israel’s war against Iran began, although below the Sept. 22 peak of $6.53 a gallon. The spike in diesel has been magnified by Ukrainian attacks on refineries in Russia, one of the world’s top diesel exporters, and export restrictions in China. Diesel has risen 77% this year, putting it on track for the largest year-on-year percentage increase since AAA started tracking the data in 2000.
In recent days, several Midwestern and Southern states have already sought to tamp down the rising diesel costs by increasing access to dyed diesel for use in highway vehicles. Dyed diesel is essentially the same as regular diesel, but it is exempt from the federal highway tax of 24.3 cents per gallon, as well as certain state highway taxes. State taxes and fees on diesel, which are typically used to fund road construction and maintenance, averaged 35.5 cents per gallon as of January 2026, according to the U.S.
Energy Information Administration. Dyed diesel is not available at most ordinary gas stations or truck stops, and it is normally prohibited for highway use. Instead, it is used off-road by farm vehicles like tractors.
The fuel is marked with a small amount of red dye, so that inspectors can distinguish it from regular diesel. The order directs the secretaries of Transportation, Agriculture, Defense, and the Treasury to “temporarily allow off-road ‘dyed’ diesel for highway use and defer the applicable Federal excise tax, lowering costs for Americans.” That means that vehicles can use dyed diesel fuel on highways without immediately paying federal taxes, while the Administration seeks to eliminate those deferred tax obligations entirely. The order also encourages states to halt inspections and suspend state taxes for on-road use of dyed diesel.
Extract — continue reading at the source.
