“Trump’s executive order on dyed diesel will offer little relief, farmers and truckers say”
What actually happened
Trump signed an executive order expanding access to red-dyed diesel (normally reserved for off-road farm and construction use) and deferring the $0.24-per-gallon federal road tax on regular diesel through year-end, as fuel prices hit records following disruption tied to the Iran conflict. Farm and trucking groups said the move is unlikely to meaningfully offset the price spike because of timing, infrastructure and state-by-state legal patchwork issues.
Key facts
- Diesel averaged $6.30 per gallon across the country, more than 70% higher than one year ago, according to AAA.
- The executive order defers the $0.24 federal tax per gallon of regular diesel, used for road projects, until the end of the year.
- Savings can compound if states take similar actions; many have eased restrictions or waived taxes on dyed diesel, including South Dakota and Iowa.
- Farmers who will see the most benefit are those who haul their own product, like livestock or fresh produce, on public roads; those who have already wrapped up harvesting won't see savings.
- A GasBuddy analyst said the largest diesel users are the least likely to use dyed diesel, since a national carrier crossing five or six states faces a patchwork of rules, legal in one state and subject to fines in the next.
- The Owner-Operator Independent Drivers Association estimates every $1 increase per gallon in fuel costs independent truckers about $400 more per week.
- American Trucking Associations' chief advocacy officer noted the order directs temporary penalty relief and potential tax deferral, not outright tax forgiveness, and said the ATA would wait for IRS implementing guidance.
What to watch for
Watch for the IRS's implementing guidance, which the ATA says will determine how the "temporary penalty relief" actually functions in practice. Also watch pump-station infrastructure and any reported surge in dyed-diesel demand that could tighten supply or trigger the "backfire" scenario one economist flagged, since not all stations are equipped for large trucks.
