President Donald Trump signed an executive order Monday night in Grand Island, Nebraska, temporarily allowing red-dyed diesel to be used on highways and deferring the federal tax on the fuel through the end of the year. Trump signed the order onstage after aide Natalie Harp carried the document to the podium, then held up the signed page as the crowd applauded. The move comes as diesel prices remain unusually high and Republicans campaign ahead of the November midterms in farm states where fuel costs have become a major issue.
Dyed diesel is the same fuel sold at truck stops but is colored red to show that it has not been taxed for highway use. Federal rules normally restrict it to farm equipment, construction machinery, heating and other off-road uses, with back taxes and penalties for using it on public roads.
The White House said the order directs the Treasury secretary, consulting the secretary of war, to defer the federal excise tax on highway use of dyed diesel through the end of 2026 without interest or penalties and to consider whether the deferred tax can be eliminated entirely. It also directs the Transportation Department to work with states, industry and labor on access to the fuel, while the Agriculture Department is instructed to protect supplies for farmers in high-demand areas. The White House will also urge states to offer similar relief.
🚨 BREAKING: By stroke of pen, President Trump just signed an executive order on stage brought to him by Natalie Harp to greenlight virtually TAX FREE DIESEL FUEL for truckers, farmers and other Americans
The Nebraska crowd just ERUPTED! 🔥
Typical trucker saves $100 per… pic.twitter.com/UL9WvbsLA3
— Eric Daugherty (@EricLDaugh) October 6, 2026
The federal diesel tax is 24.4 cents per gallon, or about $60 on a 250-gallon fill-up. The administration said federal and state relief together could save a typical truck driver more than $100 per refill, although that figure reflects the tax savings rather than a reduction in the underlying wholesale cost of diesel.
When @VP came to Council Bluffs for the rally a few weeks ago, he asked me what the administration could do to provide immediate relief to farmers.
I told him that waiving federal and state off-road requirements for red dye diesel would save our farmers more than fifty cents a… pic.twitter.com/qVZl173L9S
— Zach Lahn (@ZachLahn) October 6, 2026
Diesel averaged $6.32 per gallon nationally Monday, according to AAA, down from a record $6.53 on Sept. 22 but well above the $3.76 average recorded before the recent Iran war, CNN reported. The White House has also pointed to the Russia-Ukraine war and limited global refining capacity as factors keeping diesel prices high. Because trucking, farming and grocery distribution depend heavily on diesel, high prices can quickly feed into freight and food costs.
Nebraska had already moved on its own. Gov. Jim Pillen signed an order Sept. 24 suspending state penalties for 90 days on dyed diesel used by vehicles hauling Nebraska agricultural products and creating refunds for state fuel taxes paid on those miles. State officials said the relief applies only to agricultural hauling, does not permit unrestricted personal use and does not eliminate the federal tax.
Trump’s order goes further by extending relief to truckers as well as farmers, but it defers the federal levy rather than permanently repealing it. Full savings will also depend on whether states provide matching relief.
Democrats in the Midwest have blocked lifting fuel taxes.
