President Donald Trump has issued an executive order permitting the temporary use of red-dyed diesel, which is typically reserved for farm equipment and off-road vehicles, on U.S. highways in an effort to address record-high diesel prices. The order, signed on Monday, allows truckers and farmers to use this tax-exempt fuel and defers related federal excise taxes through the end of 2026, with the possibility of eliminating the obligation to pay the deferred taxes altogether, as directed to the Treasury Secretary in consultation with the Department of War [1].
Red-dyed diesel is usually exempt from the 24.4 cent-per-gallon highway fuel tax, and its use on public roads is generally illegal and subject to fines for tax evasion. However, several states have already relaxed restrictions on the use of tax-exempt diesel this year to help Americans manage surging fuel prices [1]. The national average price of diesel surpassed $6 per gallon in September 2026 for the first time, driven by supply disruptions linked to conflicts in Ukraine and Iran, as well as limited refining capacity. Americans are now spending approximately $700 million more per day on gas and diesel compared to the previous year, according to Bob McNally, president of Rapidan Energy [1].
The White House estimates that truckers could save over $100 per fill-up due to the executive order [1]. In addition, the Group of Seven nations agreed to release 100 million barrels of diesel and crude reserves following pressure from President Trump, who had previously considered a ban on U.S. exports of the fuel [1].
A photograph from September 22, 2026, shows diesel prices above $8 per gallon at a truck stop in Los Angeles, highlighting the severity of the price spike [1].
CONCLUSION
President Trump's executive order to allow tax-free red-dyed diesel on highways is a direct response to unprecedented fuel price increases in the U.S., driven by global supply disruptions. The move is expected to provide significant cost relief for truckers and farmers, with potential broader market impacts as the government explores further tax relief measures.