President Trump signed an executive order Monday suspending restrictions on tax-exempt red-dyed diesel, saying the move will reduce fuel costs for truckers and ultimately bring down grocery prices for consumers nationwide.
Trump unveiled the measure during a loud midterm election rally in Grand Island, Nebraska, calling it an “unprecedented step to bring down costs” and suggesting it could give Republicans a boost in the crucial November elections.
He explained that farm machinery, construction equipment and other off-road vehicles have long used red-dyed diesel, a fuel chemically identical to standard diesel but sold without the usual taxes for off-road applications and large trucks.
“Tonight, I’m signing a historic executive order” that waives the off-road limitation and permits anyone to buy tax-free red-dyed diesel for any purpose, Trump said from the stage.
At Trump’s request, White House aide Natalie Harp brought the document to the podium, where the president signed it in front of the rally crowd.
Turning to Sen. Pete Ricketts, R-Neb., and Republican Gov. Jim Pillen, Trump said the fuel policy should “absolutely ensure” their reelections, telling both candidates, “I guarantee you that.”
Trump claimed the typical truck driver could save more than $100 on each fill-up once the order takes effect.
He also said farmers would benefit by saving “millions and millions of dollars” on fuel expenses.
The president further argued that lower diesel costs would spread through the economy, substantially reducing the prices of transported goods, including groceries. He described signing the order as “an honor.”
Red-dyed diesel contains the same fuel as conventional diesel; the red coloring identifies it as fuel that is exempt from certain taxes.
Before Monday’s action, the fuel was intended for equipment such as tractors and generally could not be used on public roads.
The executive order comes after Trump last week arranged for as many as 100 million barrels of diesel oil to be released from European reserves as officials sought to ease sharply rising fuel prices.
According to AAA, the national price of diesel reached a record $6.52 per gallon last month.
Although the average slipped to $6.32 per gallon by Monday, it remained well above the $3.70 average recorded at the same point last year.
Because diesel powers heavy-duty trucks, elevated prices affect the cost of moving products across the country—and can ultimately raise the price of nearly everything delivered along the nation’s highways.
Trump said the temporary relaxation of the red-dyed diesel rules would not be needed for long.
“Prices are plummeting,” he said, predicting they would fall even further in the near future. He linked that forecast to what he described as the expected end of the war in Iran, which he has said will come “very soon” after the midterm elections.
