An executive order signed by President Trump removes the off-road-use restriction tied to red-dye diesel, opening up purchases of the tax-exempt fuel to buyers regardless of their intended purpose. The directive makes available up to 100 million barrels of diesel, a provision described as intended to bring down fuel costs.
Trump signed the executive order at a rally held in Grand Island, Nebraska. He described the directive as an unprecedented move toward reducing costs, projecting that it would lead to cheaper grocery bills for households nationwide. According to the president, the move would reduce costs for farmers and bring down prices on goods more broadly.
Red-dyed diesel has long served as the standard fuel across agricultural machinery, construction plant, and a range of other off-road equipment. Chemically, the dyed fuel and its taxed counterpart are the same product — the red colouring marks diesel set aside for off-road equipment and large vehicles, exempting it from the levies applied at the pump. Trump announced plans to dissolve that boundary through the executive order, a move that would allow any buyer, whatever their purpose, to purchase the tax-exempt fuel.
According to the president, truck operators topping off their fuel would walk away with upwards of $100 in their pockets on each visit to the pump. Trump told reporters the executive order would reduce prices across all goods — groceries included — by a notable amount, and that farmers would see meaningful cost savings as a result.
The remarks were directed at Nebraska Sen. Pete Ricketts along with a Republican governor. Speaking at a campaign event where both Pete Ricketts and Jim Pillen were seeking re-election, Trump told the pair that his endorsement would, in his view, secure their victories, while separately noting his unfamiliarity with a particular fuel type, saying he had no idea what it was.
AAA data placed the nationwide average price of diesel at $6.52 per gallon the month before, a figure that stood as the highest on record in the United States. By the time the order was signed, the per-gallon price had pulled back to $6.32 — still roughly 70 percent above the $3.70 figure recorded at the equivalent point twelve months earlier.
Red-dyed diesel — the grade reserved for heavy haulage — sits at the base of what trucking operators pay per load, and those costs filter through to the shelf price of goods transported by road. At a press briefing, Trump indicated the loosening of rules around that fuel category would be a short-term measure.
According to a White House fact sheet, off-road diesel — the kind used in farming and similar non-highway operations — carries no federal or state excise tax liability and receives a distinctive dye so that authorities can identify it in the field. Over the coming 20 days, a considerable volume of diesel is scheduled for immediate release.
