U.S. President Donald Trump on Monday signed an executive order to expand access to tax-exempt diesel as soaring fuel prices raise concerns ahead of the November 3 midterm elections. Diesel prices reached a record of about $6.50 a gallon last month, increasing pressure on consumers and businesses and adding to concerns over the cost of living.
The order waives the requirement that tax-free, red-dyed diesel be used only for off-road purposes, allowing broader access to the fuel traditionally used by farmers and certain off-road vehicles. It directs the Treasury secretary, in consultation with the Pentagon chief, to defer federal excise taxes on dyed diesel used on roads for the remainder of the year and explore ways to eliminate those deferred payments. The Agriculture Department was also instructed to ensure farmers have access to the fuel in high-demand areas.
Diesel prices have risen sharply amid disruptions linked to the U.S.-Israeli war on Iran and Russia’s war in Ukraine, including attacks on refineries in the Middle East and Russia. G7 countries last week announced plans to release 100 million barrels of diesel following pressure from Trump, who had considered restricting U.S. fuel exports. The move comes as Trump’s approval rating stood at a record-low 32%, with a Reuters/Ipsos poll showing that Americans are particularly concerned about the rising cost of living.
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