Trump poised to ease red diesel limits in attempt to quell fuel inflation

US President Donald Trump is set to issue an executive order on Monday to broaden access to tax-exempt diesel, according to two sources familiar with the matter, Reuters reported. The order is expected to be unveiled shortly, with diesel prices surging to a record high of approximately $6.50 a gallon last month, posing a significant risk to Trump ahead of the November 3 elections.

The fuel, crucial for trucking goods, has experienced price hikes due to the ongoing wars in Iran and Ukraine, which have targeted refineries in Russia and the Middle East. The executive order could encompass multiple methods to increase access to diesel, potentially involving the release of red dye diesel fuel utilized by the agricultural sector and certain off-road vehicles, as suggested by the sources.

Additionally, a third source indicated that the order may instruct the US Department of Transportation to collaborate with states in waiving taxes on road diesel. Earlier this week, G7 nations announced their intention to release 100 million barrels of diesel, in response to Trump's calls for banning US exports of the fuel; however, it remains unclear whether the release will consist of entirely new supplies or adhere to an international agreement from March.