WASHINGTON: US President Donald Trump has signed an executive order expanding access to tax-exempt red-dyed diesel as the country faces sharply higher fuel prices.
Trump signed the order on Monday during a rally in Nebraska. He said the directive would temporarily waive the traditional off-road requirement for dyed diesel and allow broader public access to the fuel.
Red-dyed diesel is normally used for off-road purposes, including farming and construction. It is exempt from federal highway fuel taxes and is dyed red to help authorities identify its use.
Tax Relief to Continue Through Year-End
The executive order directs the Treasury Department to defer certain federal diesel tax payments for eligible users from October 5 through December 31.
The deferred taxes would be subject to relief from interest and penalties where authorised by law. The order also directs the Treasury Department to explore ways to eliminate the obligation to pay the deferred taxes.
The order further directs the Agriculture Department to ensure adequate supplies of dyed diesel in areas with high demand.
The Transportation Department will coordinate with state governments, industry representatives and labour organisations to support access to the fuel.
Diesel Prices Rise Amid Global Disruptions
Diesel prices have risen sharply amid disruptions to global fuel supplies.
The White House has linked the pressure on diesel markets to the Russia-Ukraine war and reduced global refining capacity. Reuters has also reported that disruptions linked to the conflict involving Iran have contributed to tight fuel supplies.
The move comes after G7 countries agreed to release 100 million barrels of diesel and crude oil from emergency reserves following pressure from Washington.
Trump had previously considered restricting US diesel exports as part of efforts to increase domestic supplies and reduce prices.
Trump Faces Pressure Over Fuel Costs
The diesel measure comes as high fuel prices remain a major concern for US consumers.
A Reuters/Ipsos poll cited by Reuters put Trump’s approval rating at 32%, while high living costs and rising gasoline and diesel prices remained key concerns among Americans.
The administration says the temporary tax relief is intended to reduce fuel costs for farmers, truckers and other workers affected by higher diesel prices.
