US President Donald Trump has signed an executive order aimed at lowering diesel costs for American farmers and truckers by temporarily allowing tax-free dyed diesel to be used on highways and directing the Treasury to defer applicable federal excise tax obligations through the end of 2026.
The White House said the measure was introduced in response to restricted global diesel supplies and rising fuel prices, which have placed additional cost pressures on the agriculture and trucking industries.
Under the order, the Treasury secretary has been given five days to determine whether relief can be granted under existing tax law, including which taxpayers would qualify.
Subject to those determinations, eligible taxpayers could defer excise taxes incurred on specified diesel use between Oct 5 and Dec 31, 2026, without penalties or interest.
The order also directs the Internal Revenue Service to announce that it will not impose certain penalties when dyed diesel — normally intended for tax-exempt off-road uses — is sold for or used on highways during the same period.
The White House said the federal diesel tax amounts to 24.4 US cents per gallon, equivalent to roughly US$60 on a 250-gallon fill. Savings could exceed US$100 per fill in states that introduce corresponding relief measures.
Trump also directed the Treasury to explore avenues, including legislation, to eliminate rather than merely defer the tax liabilities covered by the relief.
