US President Donald Trump has signed an executive order aimed at providing temporary relief from high diesel costs by expanding access to red-dyed diesel for highway use. The order was signed on October 5, 2026, during Trump's visit to Grand Island, Nebraska, as diesel prices remain significantly higher than normal levels in the United States.
The executive order directs the US Treasury Department to determine whether certain federal tax relief provisions can be applied to qualifying dyed diesel used on highways. If the required legal conditions are met, certain diesel fuel tax payments incurred between October 5 and December 31, 2026, can be deferred without interest, penalties or additional charges.
The move represents a temporary change to the treatment of red-dyed diesel, which is normally intended for off-road uses. Red-dyed diesel is commonly used by farmers, construction companies and other operators whose vehicles and machinery do not normally travel on public highways. The fuel is dyed red so that authorities can distinguish it from regular on-road diesel and enforce applicable tax rules.
Under the existing system, highway diesel is subject to federal and state fuel taxes, while diesel intended for qualifying off-road purposes is generally exempt from those highway taxes. The Trump administration's new policy seeks to temporarily ease the federal tax burden associated with qualifying highway use of dyed diesel.
The White House said the policy is intended to help American truckers, farmers and other workers who are facing higher operating costs because of elevated diesel prices. The administration has argued that lower fuel expenses could also reduce transportation costs and eventually help lower the prices of goods transported by road.
Trump has also said the measure could benefit consumers because trucking plays a major role in moving food, manufactured products and other goods across the United States. The administration has presented the order as a temporary measure designed to provide relief while broader fuel supply conditions remain difficult.
The executive order does not, however, automatically mean that every motorist can immediately buy red-dyed diesel without any tax obligations. The order directs the Treasury Secretary to establish the specific relief available, including the taxpayers, locations, activities and deadlines covered by the policy.
The order also instructs the Treasury Department to issue implementation guidance explaining how the relief will work. This guidance is expected to clarify which users can benefit and how the deferred tax obligations will be handled.
Another important part of the order is its reference to possible tax forgiveness. The Treasury Department has been directed to explore ways, including possible legislation, to eliminate the obligation to pay taxes that are deferred under the policy. This means that the current executive action primarily establishes temporary deferral and penalty relief, while permanent forgiveness would require further action where necessary.
