Fuels News & Analysis

Trump Permits Red-Dyed Diesel on Highways Amid Diesel Price Surge

President Donald Trump signed an executive order to allow the temporary use of red-dyed diesel on highways, a measure typically reserved for farm use. This move aims to reduce record-high fuel costs, with diesel prices surpassing $8 per gallon in some areas. The dyed diesel is exempt from the usual 24.4 cent-per-gallon highway fuel tax. This tax relief could save truckers over $100 per fill-up, according to the White House. The Treasury Secretary, in consultation with the Department of War, has been directed to defer the collection of federal excise tax on highway diesel through the end of 2026. This is part of an initiative to alleviate financial stress on Americans, who are spending approximately $700 million more per day on gasoline and diesel compared to a year ago. The Trump administration pointed to global supply issues due to conflicts in Ukraine and a lack of refining capacity as reasons for the spike in diesel prices. Releasing 100 million barrels of diesel and crude reserves was also agreed upon by the Group of Seven nations. The administration's actions are intended to ease consumer costs and stabilize the market. For investors, this could mean moderated transportation costs if the policy effectively lowers fuel prices.