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United States President Donald Trump on Monday signed an executive order allowing drivers to use tax-exempt red-dyed diesel, a fuel normally reserved for farm machinery and other off-road equipment, on public roads.
Trump announced the measure at a rally in Nebraska, saying the order would remove the requirement that the fuel be used only off-road and allow drivers to buy it tax-free.
He also acknowledged that he was unfamiliar with the fuel, joking that he did not know what it was but had heard it was “very good.”
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“I don’t know what the hell it is, but whatever it is, it’s supposed to be very good,” he said.
However, a White House fact sheet accompanying the order, according to AFP, outlined a narrower measure. Rather than immediately eliminating the tax, it directs Treasury Secretary Scott Bessent, in consultation with Defence Secretary Pete Hegseth, to defer taxes owed on dyed diesel used on public roads until the end of the year without interest or penalties.
The Treasury is also expected to explore ways of eliminating the tax liability altogether.
The order gives federal authorities and state governors discretion to suspend inspections and waive tax obligations that drivers would otherwise incur when using the fuel on public roads.
The White House fact sheet did not link the measure to the war in Iran, instead attributing higher fuel prices to the Russia-Ukraine war and a global shortage of refining capacity. It also blamed Democratic-led states for closing refineries as part of their green-energy policies.
Trump’s move comes as rising diesel and pump prices put pressure on his Republican Party ahead of the US midterm elections.
At the Nebraska rally, Trump also highlighted a deal reached with Europe to release 100 million barrels of refined diesel from strategic reserves over four months.
The president had previously considered restricting US diesel exports as prices climbed.
Diesel is widely used to power trucks, agricultural machinery and construction equipment.
US diesel prices have risen above $6 a gallon in recent weeks, while export restrictions imposed by Russia following Ukrainian attacks on its fuel infrastructure have added pressure to global markets.
