Less than a month before the midterms, President Trump has issued an executive order to make dyed diesel more accessible through the end of the year, aiming to lower fuel costs for frequent users. Diesel prices have surged due to supply chain disruptions, including attacks on Russian refineries and reduced exports from Russia and China. The U.S. average for a gallon of diesel hit a record $6.52 a few weeks ago, though it has since eased slightly.
Dyed diesel, also known as red-dyed diesel, is typically reserved for off-road vehicles like farm and construction equipment. It is exempt from the federal tax of 24.4 cents per gallon on commercial diesel. The executive order now allows dyed diesel to be used on highways without IRS penalties, potentially saving drivers up to 60 cents per gallon when combined with state tax exemptions. However, the overall price remains higher than last year due to the ongoing supply issues.
The order could help farmers, truckers, and other workers who rely on diesel, but access to dyed diesel is limited. It is not widely available at gas stations and would require purchasing from special wholesalers or rural gas stations. White House spokesperson Taylor Rogers stated that the president is taking 'historic measures' to alleviate oil supply disruptions and lower prices.
Other potential solutions, such as a diesel export ban, have been met with resistance from refiners, who argue it would lead to excess storage and reduced production. Analysts say the only real fix would be ending the wars in Iran and Ukraine, allowing more oil to flow freely around the world.