President Donald Trump is preparing to announce an executive order to expand the supply of tax-exempt diesel fuel used in agriculture and construction equipment. This move is seen as an effort to alleviate the burden of rising diesel prices ahead of next month's midterm elections.
According to Reuters, citing sources, Trump is expected to unveil the executive order as early as today, which will include measures to make tax-exempt diesel, known as 'red diesel,' more accessible.
Red diesel is chemically identical to regular diesel but is either tax-exempt or subject to lower taxes, with a red dye added to distinguish it. Currently, its use is restricted to off-road equipment such as agricultural and construction machinery.
There is also a possibility of temporarily waiving taxes on road diesel used in trucks, in consultation with state governments.
On October 5, when asked by reporters at the White House if he planned to ease restrictions on the use of red diesel, Trump responded, "Yes. We will help them with the diesel issue. We are doing a lot for farmers."
This initiative comes as diesel prices in the U.S., the world's largest diesel exporter, have surged significantly. The impact of wars in Russia and the Middle East has disrupted refining facilities, leading to production and supply challenges, which have heightened instability in the international diesel market. According to the American Automobile Association (AAA), the average retail price of diesel in the U.S. as of October 5 is $6.32 per gallon, still high compared to $3.69 a year ago.
Last month, Trump pressured Europe to release its strategic diesel reserves and even mentioned the possibility of restricting U.S. diesel exports. In response, the Group of Seven (G7) announced on October 2 that it had agreed to release 100 million barrels of strategic diesel and crude oil into the market.
* This article has been translated by AI.
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