Trump to Announce Diesel Cost Measures During Nebraska Campaign Stop/ TezzBuzz/ WASHINGTON/ J. Mansour/ President Donald Trump plans to announce executive actions Monday aimed at easing diesel costs, including a tax review and broader access to tax-exempt dyed fuel. The expected Nebraska announcement follows his rejection of a diesel export ban as farmers face high expenses during harvest season. Analysts say the measures could offer relief to road users while doing little to resolve the supply shortages driving elevated prices.
Quick Look
- Expected announcement: Trump plans to unveil diesel-related executive actions during a Monday campaign stop in Nebraska.
- Proposed measures: The actions include a Treasury tax review, expanded availability of red-dyed diesel and requests for state fuel-tax waivers.
- Export ban rejected: Trump ruled out restricting diesel exports Friday after Europe agreed to release fuel reserves.
- Pump prices: Average U.S. diesel prices reached $6.32 per gallon Monday, down 13 cents in a week but up $2.63 from a year earlier.
- Existing state action: Ten states representing roughly one-third of U.S. diesel sales had already broadened access to dyed diesel.
- Limited farm relief: Farmers already using tax-exempt fuel may see little direct benefit from expanded access.
- Infrastructure concerns: Fuel-tax suspensions could reduce revenue used for road repairs and other transportation projects.
Deep Look
Trump Plans Executive Actions to Address High Diesel Prices
President Donald Trump is preparing to announce executive actions Monday intended to lower diesel costs, according to three people familiar with the plans.
The announcement is expected during a campaign stop in Nebraska, where farmers and ranchers have voiced frustration over fuel expenses and the president’s decision to increase foreign beef imports.
Those concerns have intensified during peak harvest season, creating political pressure in both strongly Republican states and competitive midterm battlegrounds.
The planned measures follow weeks of shifting administration statements about whether to restrict diesel exports. Trump rejected an export ban Friday after repeatedly discussing it as an option.
Proposed Order Targets Diesel Taxes and Dyed-Fuel Restrictions
The executive order would direct the Treasury Department to review certain diesel taxes, according to the people familiar with the plans.
It would also direct states to expand the availability of tax-exempt red-dyed diesel, which is used in agriculture, construction and other industries, and urge them to waive certain fuel taxes.
Additional actions would involve non-enforcement of dyed-diesel limitations.
Some Republican governors have already adopted similar measures, and administration officials have been preparing federal action involving dyed diesel for more than a week.
The White House did not immediately respond to a request for comment.
Agriculture Secretary Brooke Rollins said on Fox News Monday morning that Trump would make an “announcement” about additional short-term relief for farmers in Nebraska that afternoon. She said she would also discuss the measures during a visit to Iowa.
High Fuel Costs Add to Republican Midterm Pressure
Elevated diesel prices have increased operating costs for farmers while contributing to persistent inflation ahead of November’s elections.
The ongoing war against Iran and Ukrainian attacks on Russian refineries have reduced global diesel availability, pushing fuel costs higher.
Republicans face growing pressure to offer relief as those expenses threaten the party’s hold on Congress.
However, some Republicans oppose suspending diesel excise taxes because states depend on the revenue to fund infrastructure, including road maintenance.
State Measures Help Ease Prices, but Diesel Remains Expensive
As of Friday, 10 states accounting for approximately one-third of U.S. diesel sales had taken steps to allow broader use of dyed diesel, according to ClearView Energy Partners.
Several states also waived taxes on diesel used in agricultural vehicles.
Those actions helped bring the average diesel price to $6.32 per gallon Monday, according to AAA.
That was 13 cents below the previous week’s average but still $2.63 higher than a year earlier.
The modest decline leaves farmers, freight operators and other diesel users facing substantially elevated fuel bills.
Analyst Says Road Users Could Benefit More Than Farmers
Patrick De Haan, GasBuddy's head of petroleum analysis, said last week that federal action on dyed diesel could lower costs for freight truck drivers and other operators of on-road vehicles.
Farmers and construction equipment operators who already use tax-exempt diesel would receive less direct benefit.
“It could save on-road users ~60c/gal,” De Haan said in a social media post on X. “But farmers already use dyed diesel and are still paying record prices. Taxes aren’t the problem, supply is.”
His assessment highlights a limitation of the proposed approach: tax relief does not directly restore the fuel supply lost through disruptions to global production.
Fuel-Tax Suspensions Raise Questions About Road Funding
Denton Cinquegrana, chief oil analyst at Dow Jones Energy, said suspending fuel taxes can provide immediate savings at the pump but create longer-term consequences for transportation infrastructure.
“When you’re not collecting taxes, you’re just kicking the can down the road, because you have to fix roads and stuff like that,” Cinquegrana said.
The concern adds another complication as the administration weighs short-term relief against the loss of revenue for public projects.
Trump Rejects Export Ban After Public Policy Debate
Expanded access to dyed diesel represents a more limited intervention than other options the administration considered, including a complete ban on diesel exports.
Agriculture-state Republicans, including Iowa Sen. Chuck Grassleyhad urged the administration to restrict exports to address rising farm expenses.
Trump publicly supported the idea several times while Energy Secretary Chris Wright and White House energy advisers developed alternative proposals.
On Friday, Trump ruled out an export ban and said he had never seriously considered one, following Europe’s agreement to release fuel from its diesel reserves.
Global Supply Disruptions Drive Record US Diesel Exports
American diesel exports have climbed to record levels since the United States and Israel launched their war against Iran in February and Ukraine began targeting Russian refineries.
Both conflicts have significantly reduced diesel availability in global markets.
The administration’s planned tax and regulatory actions seek to ease domestic costs against that backdrop, while the underlying supply pressures remain unresolved.
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