Trump signs order for cheaper, 'red-dyed' diesel — avoids federal highway tax
US President Donald Trump has signed an Executive Order late on Monday to immediately cut diesel costs by temporarily allowing highway use of tax-free "dyed diesel" and deferring the federal diesel tax on that fuel through the end of the year — with no interest, no penalties. The order temporarily waives the “off-road only” rule for tax-exempt red-dyed diesel and defers the federal excise tax on…
US President Donald Trump has signed an Executive Order allowing the use of tax-free, red-dyed diesel on public highways for the remainder of 2026, deferring the federal diesel tax on that fuel. Red-dyed diesel is typically about 24 cents per gallon cheaper than clear on-road diesel because it avoids the federal highway tax. This move provides a cost relief at the pump for diesel users, including farmers and fleets that use high volumes of diesel fuel.
The order directs the Treasury to explore ways to eliminate the deferred tax obligation entirely, though that would require further action and is not automatic.
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