Trump expected to widen use of tax-exempt diesel to cut fuel costs
President Trump is expected to announce executive actions Monday that would let more drivers use tax-exempt red-dyed diesel and push states to waive some fuel taxes, according to people familiar with the plans. Diesel averaged $6.32 a gallon on Sunday, AAA said.
AI-assisted · US Brief desk · Sources listed below
What happened
President Donald Trump is expected to announce executive actions Monday to widen the use of tax-exempt red-dyed diesel, according to people familiar with the plans cited by Reuters, Bloomberg and Politico. The White House had not released the order as of Monday afternoon.
What's in it: Politico reported the steps include a Treasury Department review of certain diesel taxes. The order would also tell states to make more red-dyed diesel available, urge them to waive some fuel taxes, and ease enforcement of dyed-diesel limits. A Reuters source said it would likely direct the Transportation Department to work with states on waiving taxes on road diesel.
Why red diesel: Red diesel is the same fuel as road diesel, plus a dye. It is meant for off-road use, such as farm and construction equipment, and is exempt from the 24-cent-a-gallon federal excise tax. Bloomberg said letting it be used on roads without penalties would work like a tax break for pickups and other on-road vehicles. It would not cut costs for tractors that already run on it.
What’s next
Watch for the order's text, whether states follow its tax and dyed-diesel requests, and whether pump prices keep falling as the emergency barrels arrive.
More context
Prices: U.S. diesel averaged $6.32 a gallon on Sunday, according to AAA. That is down from a record $6.53 last month but $2.63 higher than a year ago, RFD-TV reported. Bloomberg noted diesel cost $3.76 on Feb. 28, when the U.S. and Israel launched attacks on Iran.
The administration's case: "Diesel prices are coming down, but we have more work to do," Agriculture Secretary Brooke Rollins wrote on X Monday, citing a drop of about 15 cents in recent days. She told Fox Business that Trump would likely announce relief for farmers later in the day, Bloomberg reported. Ten states have already cut fuel taxes or allowed wider use of dyed diesel, RFD-TV said.
Limits and pushback: Some Republicans oppose waiving diesel excise taxes because states use that money for road repairs, Politico reported. Bloomberg said the plan is not expected to add to overall diesel supply, which sits at its lowest seasonal level on record.
The politics: Trump is set to speak at a rally in Grand Island, Neb., at 7 p.m. ET for Sen. Pete Ricketts, AP reported. Ricketts faces independent Dan Osborn, who is backed by national Democrats. Last week the G7 agreed to release up to 100 million barrels of oil and diesel, and Trump said he would not ban U.S. diesel exports.
5 listed sources
- Reuters (Jarrett Renshaw) via KFGO, Oct 5, 2026: Trump to issue order expanding access to tax-exempt diesel fuel, sources say
- Bloomberg (Jennifer A. Dlouhy) via Transport Topics, Oct 5, 2026: Trump plans to ease limits on tax-exempt dyed diesel (includes Rollins's X post and Fox Business comments)
- Politico (Meredith Lee Hill, James Bikales), Oct 5, 2026: Trump plans executive order seeking to bring down high diesel costs
- RFD-TV (Marion Kirkpatrick), Oct 5, 2026: President Trump plans executive actions to lower diesel costs (AAA figures)
- AP (Seung Min Kim) via PBS NewsHour, Oct 5, 2026: Trump campaigns with Ricketts in Nebraska
References listed by US Brief; a source count is not a verification score.
Editorial sourcing notes
The executive order had not been released when this was published. Its contents come from Reuters, Bloomberg and Politico, each citing unnamed people familiar with the plans, so details could change. Hero photo shows a diesel price sign in Eugene, Ore., on Sept. 26, not a price tied to this story. We found no Democratic response to the plan in reporting as of 1 p.m. PT Monday.
Like US Brief? You can support it with a tip.