Trump Opens Tax-Exempt 'Red Dye' Diesel to All Drivers 'I Don't Know What the Hell It Is, But It's Supposed to Be Very Good'

President Donald Trump has signed an executive order allowing any driver to purchase tax-exempt red-dyed diesel, normally reserved for farm machinery, as US diesel prices hit record highs above $6 a gallon.

News source: Google /   https://www.nbcnews.com/

President Donald Trump signed an executive order on Monday, October 5, 2026, allowing drivers to use tax-exempt red-dyed diesel on public roads, a fuel normally reserved for farm machinery and other off-road equipment. The move came as surging pump prices tied to the Iran war weighed on his Republican Party weeks before the US midterm elections.

Speaking at a rally in Nebraska, Trump told supporters the order would "officially waive the off-road requirement and allow anyone to purchase tax-free red-dyed diesel for any reason." The president admitted he was unfamiliar with the fuel, joking to the crowd: "I don't know what the hell it is, but whatever it is, it's supposed to be very good."

Red-dyed diesel is essentially the same fuel as standard diesel, but it is exempt from highway fuel taxes. The fuel is dyed red so authorities can distinguish it from diesel intended for road use.

A Narrower Measure Than Announced

A White House fact sheet released alongside the order described a more limited measure than the one Trump announced on stage. Rather than scrapping the tax, the order instructs Treasury Secretary Scott Bessent, in consultation with Defense Secretary Pete Hegseth, to defer the tax owed on dyed diesel used on roads until the end of the year, without interest or penalties, and to look for ways to cancel the charges altogether. The White House said federal authorities and state governors could use their discretion to halt inspections and waive the tax liability drivers would otherwise face. The fact sheet made no mention of Iran, instead blaming the price surge on the Russia-Ukraine war and a global shortage of refining capacity. It also accused Democratic-led states of closing refineries in the name of green energy policies.

Record Diesel Prices

Diesel prices in the United States have hit record highs above $6 a gallon in recent weeks, with export restrictions imposed by major supplier Russia after Ukrainian attacks on its fuel facilities adding to pressure on global markets. The price of diesel surged above $6 per gallon last month and, as of October 5, was still elevated at $6.3207 per gallon, according to AAA. This was a slight decline from the all-time high of $6.53 per gallon in late September. At the Nebraska rally, Trump also praised a deal struck with Europe this month to release 100 million barrels of refined diesel from strategic reserves over the next four months. He had floated a ban on US exports of diesel, which powers trucks, farm equipment and construction machinery.

"We're not going to need it long," Trump said of easing the restrictions on red-dye diesel.

FAQ:

Q: What did President Trump's executive order do regarding red-dyed diesel?
A: Trump signed an executive order allowing drivers to use tax-exempt red-dyed diesel on public roads, normally reserved for farm machinery and off-road equipment.

Q: What is red-dyed diesel?
A: Red-dyed diesel is essentially the same fuel as standard diesel, but it is exempt from highway fuel taxes and dyed red so authorities can distinguish it from road diesel.

Q: What is the federal diesel tax rate?
A: The federal diesel tax stands at $0.244 per gallon, or approximately $60 on a 250-gallon fill.

Q: Why did Trump sign this order now?
A: Diesel prices have hit record highs above $6 a gallon due to the Iran war and global refining shortages, putting political pressure on Republicans ahead of the midterm elections.

Q: Does the order permanently eliminate the diesel tax?
A: No. The order defers the tax through the end of the year without interest or penalties, and directs officials to explore ways to cancel the charges.