US President Donald Trump has teased a major announcement on diesel as fuel prices remain near record highs, adding pressure on the administration weeks before the November 3 congressional midterm elections. "We have a big announcement coming up on diesel," Trump said at a White House event on Friday, without providing details. "We have, I think, some big news on that diesel situation. We're going to be knocking the hell out of it." The president's comments come as US diesel prices have surged 70% since the US-Israeli war on Iran began, despite recent efforts by Trump to increase supplies through various measures including pressuring allies to release emergency fuel reserves and expanding access to tax-exempt, red-dyed diesel. The spike in fuel costs has emerged as a key concern for voters preparing to decide control of Congress in the November elections.
US President Donald Trump has officially signed an executive order allowing wider use of tax-exempt red diesel on roads through year-end, marking his latest bid to pare fuel costs amid soaring diesel prices. The order was signed on October 5, 2025, during an event in Grand Island, Nebraska, part of a month-long blitz to rally Republican voters before an election that threatens to cost the president's party control of Congress. As reported by Bloomberg, Trump said his red-dyed diesel plan would "officially waive the off-road requirement and allow anyone to purchase tax-free, red-dyed diesel for any reason." The president pitched the initiative as a tax savings, calling it "an unprecedented step to bring down costs" that would "drive down the cost of all goods, including grocery prices, very substantially."
The executive order contains various ways to expand diesel access that could include making more available so-called red-dyed diesel fuel, which is used by the agriculture industry and certain off-road vehicles, according to Reuters sources. Under Trump's order, the IRS will make clear it won't impose penalties when dyed diesel is sold for highway use through the end of 2026. The announcement includes a Treasury Department review of certain taxes for diesel and would direct states to do more to increase the availability of tax-exempt red-dyed diesel, used in farming, construction and other industries. Additionally, the order will urge states to waive certain fuel taxes, providing relief for trucking and other industries that rely heavily on the fuel. These measures are specifically designed to help farmers, trucking operators and other fuel-intensive sectors cope with elevated costs as rising diesel costs intensify pressure on US freight and agricultural users.
President Trump is preparing to ease restrictions on the use of red dyed diesel, a tax-exempt variety of the fuel typically limited to off-road purposes, according to Bloomberg. Red dyed diesel is chemically identical to on-road diesel but is exempt from the 24-cents-per-gallon federal excise tax, so broadening its permitted use in on-road vehicles would effectively deliver a tax cut to drivers. The measure is aimed at cutting costs for users of on-road vehicles such as pickup trucks, but would not directly lower expenses for farm equipment operators who already run on tax-exempt red diesel. The directive itself casts the plan as a money-saving initiative, stating "This targeted action will put money directly in the pocket of American farmers, truckers, and workers, to support their vital service to our Nation." However, energy experts and economists have questioned whether Trump's move would have a sweeping impact, warning the infrastructure for delivering red diesel is limited and it risks blowback in the form of higher prices for farmers if more on-road customers strain existing supply.
Oil prices declined on Friday as concerns over potential disruptions to Middle Eastern supplies eased after Trump said the US would not attack Iran before the midterm elections, according to Reuters. Brent crude futures fell $1.10, or 1.1%, to $103.18 a barrel by 1328 GMT, while US West Texas Intermediate crude futures declined 49 cents, or 0.5%, to $91 a barrel. Brent remained on course for a weekly gain after settling 4% higher on Thursday, while WTI was set for a slight weekly decline. The decline came as plans by China, the world's largest oil importer, to resume refined fuel exports after a brief suspension during its Golden Week holiday also weighed on prices. PVM Oil Associates analyst Tamas Varga said Trump's comments on Iran and China's planned resumption of fuel exports were putting downward pressure on oil prices. However, the market remains volatile amid growing threats to shipping in the Gulf and the Strait of Hormuz, with Iran's Tasnim news agency reporting that Foreign Minister Abbas Araqchi said Tehran was reviewing Washington's response to an Iranian proposal to reopen the Strait of Hormuz within seven days.
The Monday announcement comes as high diesel costs and the president's step to increase foreign beef imports ahead of November have riled farmers and ranchers at the peak of harvest season across deep-red and battleground states, according to Reuters. Trump's decision to announce the move in a largely rural conservative Nebraska district that he won handily in all three presidential campaigns underscores how Republicans are on the defensive with less than a month to Election Day. The president sought to boost Republican Nebraska Senator Pete Ricketts, who finds himself in a surprisingly competitive race against an independent challenger, Dan Osborn. "This should absolutely assure your election," Trump told Ricketts on Monday. However, some Republicans have opposed efforts to waive excise taxes on diesel as states use those revenues to pay for infrastructure projects such as road repairs. The administration's efforts have yielded results internationally, with G7 countries announcing last week that they would release 100 million barrels of diesel following pressure from Trump, who had considered restricting US diesel exports.
