Trump’s Dyed Diesel Order Provides Common Sense Relief, For Now

President Donald Trump signed a new executive order on Monday designed to provide immediate, direct relief from high diesel prices for farmers and truckers. The order allows for the on-road use of tax-free dyed diesel that is normally reserved for off-road use in vehicles such as combines and tractors. Effective from Oct. 5 through Dec. 31, truckers and farmers can burn dyed diesel on the highways with the 24.4 cents-per-gallon federal excise tax deferred. No interest, no penalties. 

And it gets better: The order also directs Treasury Secretary Scott Bessent to “explore pathways to eliminate the obligation to pay the deferred taxes.” As the Iranian regime has found out the hard way in recent months, Secretary Bessent has proved to be extremely creative when it comes to exercising his discretion.

Many believe dyed diesel is a different product from on-road diesel, but this is a myth. The products are chemically the same, have the same emissions profile, and provide the same mileage when used in transportation. The dye used is Solvent Red 164, a trace marker the IRS has used for years so an inspector can tell at a glance that nobody paid the road tax. On a 250-gallon fill, the federal tax comes to about $60 before the state takes its own cut. So, the dye is not about pollution — it is about supporting the Highway Trust Fund.

President Trump also urges state governments to suspend their own excise taxes on diesel for the final three months of the year. In high tax states like California, Illinois and Indiana, those taxes add another 48 to 60 cents per gallon of diesel, and all that is before state sales taxes kick in.