The President of the United States, Donald Trump, signed on Monday an executive order to expand access to tax-exempt diesel, which he announced during a rally in Nebraska.
The high prices of diesel, which reached a record of about $6.50 per gallon last month, pose a risk for Trump ahead of the November 3 midterm elections in the United States, in which control of Congress is at stake. Trump’s Republican Party currently holds a narrow majority in the Senate and in the House of Representatives.
Fuel prices, essential for the road transport of goods, rose in response to the U.S. and Israel’s war against Iran and Russia’s invasion of Ukraine, conflicts that led to attacks on refineries in the Middle East and in Russia.
Trump stated that the directive would waive the off-road use requirement for tax-exempt diesel and would allow anyone to purchase red-dyed diesel, used by the agricultural sector and some off-road vehicles.
“I hope we won’t need this for long,” Trump said about the exemption.
The White House order directs the Secretary of the Treasury, in consultation with the Secretary of Defense, “to delay the payment of the federal tax on consumption charged for the use on public roads of dyed diesel for the remainder of the year, without interest or penalties, and to explore ways to eliminate the obligation to pay the taxes deferred.”
Dyed diesel, or dyed, is ordinary diesel that receives red dye to indicate that it is exempt or taxed at a reduced rate, and is typically restricted for use in agricultural machinery, generators, and construction equipment.
The order also directs the U.S. Secretary of Agriculture to “ensure farmers’ access to dyed diesel in high-demand areas,” while requesting the Secretary of Transportation to coordinate with the states, industry leaders, and labor unions to secure access to dyed diesel.
The G7 countries announced last week that they would release 100 million barrels of diesel, after pressure from Trump, who had considered banning the United States’ exports of the fuel. But it was unclear how much of this release would correspond to entirely new supplies or to fulfilling a global agreement reached in March.
Trump’s approval rating has remained at a historic low of 32% in recent days, according to a Reuters/Ipsos poll completed on Monday, with Americans more concerned about the high cost of living, driven by rising gasoline and diesel prices due to the U.S. and Israel’s war against Iran.
