Trump signs executive order deferring the federal diesel tax on red-dyed fuel through Dec. 31

President Donald Trump signed an executive order Monday evening waiving the off-road requirement for tax-free red-dyed diesel and deferring the federal diesel tax on highway use of the fuel through the end of the year — with no interest and no penalties, according to the White House on Oct. 5.

Trump signed the order onstage at a rally in Grand Island, Nebraska, after White House aide Natalie Harp carried it to the podium. The order directs the Treasury secretary, in consultation with the Pentagon chief, to defer payment of the federal excise tax on on-road use of dyed diesel for the rest of the year and to explore pathways to eliminate the obligation to pay the deferred taxes. The Agriculture secretary is directed to ensure farmers' access to dyed diesel in high-demand areas, and the Transportation secretary to coordinate with states, industry leaders, and labor organizations on access.

The federal diesel tax is $0.244 per gallon — about $60 on a 250-gallon fill — and the White House says savings will top $100 per fill where states match the federal action. Trump said the order would save truckers an average of $100 each time they fill up and "drive down the cost of all goods, including groceries very substantially." Diesel averaged $6.32 a gallon on Oct. 5, according to AAA figures cited by USA Today, after first crossing $6 on Sept. 11; Reuters put last month's record at about $6.50 a gallon.

Two notes of caution for drivers: the order defers the tax rather than canceling it — the deferred liability could still come due unless the Treasury finds a legal path to wipe it out. And analysts are skeptical about how far pump prices will move: GasBuddy's Patrick De Haan said dyed diesel could help truckers but would do little for farmers, who already buy it tax-free, adding that "taxes aren't the problem, supply is."

Source: White House