President Trump's new executive order permits the highway use of tax-free red-dyed diesel, deferring federal taxes of $0.244 per gallon to provide immediate relief for fuel costs through year-end.
President Trump's executive order temporarily permits the highway use of tax-free red-dyed diesel, effectively deferring the $0.244 per gallon federal diesel tax through the end of the year. By removing this tax burden, the policy aims to lower fuel costs for consumers and commercial operators, which is expected to stimulate demand for diesel fuel across the transportation sector.
The order saves approximately $60 on a 250-gallon fill-up by deferring the $0.244 per gallon federal tax.
The deferral of the federal diesel tax on red-dyed diesel is effective through the end of the current year.
President Trump signed an executive order Monday authorizing the highway use of tax-free red-dyed diesel through the end of the year. The move effectively defers the $0.244 per gallon federal diesel tax, aiming to lower fuel costs for American drivers and logistics operators during the remainder of the calendar year.
Red-dyed diesel is fuel intended for off-road use, such as in farming or construction equipment, and is typically exempt from federal highway excise taxes. The executive order temporarily allows this fuel to be used on highways without penalty.