Trump Signs Executive Order Opening Tax-Free Red Diesel to Cut Record Fuel Prices

President Donald Trump signed an executive order late Monday aimed at bringing down near-record diesel prices by waiving restrictions on cheaper red-dyed diesel. The order, unveiled at a campaign event in Nebraska, amounts to a pre-election tax holiday. Red-dyed diesel is the same as regular diesel. It is simply untaxed and dyed red to distinguish it for off-road use only, such as tractors or industrial equipment. "For many years, farm vehicles, construction equipment and other off-road vehicles have used what's known as red-dyed diesel. You know what that is? I don't know what the hell it is, but whatever it is, it is supposed to be very good," Trump said, before adding it is "exactly the same as normal diesel." ## What the order does According to a White House fact sheet, the order will "temporarily allow off-road 'dyed' diesel for highway use and defer the applicable federal excise tax, lowering costs for Americans." The executive order instructs the Internal Revenue Service to waive penalties on dyed diesel for highway use through the end of the year. The catch: the tax obligations do not disappear entirely. They are deferred until next year, though the order instructs officials to explore ways to forgive them, including potential legislation. The federal diesel tax stands at $0.244 per gallon, or roughly $60 on a 250-gallon fill, according to the White House. Where states match the federal action, savings could top $100 per fill. The order also directs officials to encourage more states to adopt similar policies and to ensure farmers have access to dyed diesel in high-demand areas. ## Record prices and political stakes Allowing broad use of tax-exempt diesel could especially help truckers grappling with a historic price spike set off by the war in Iran and amplified by attacks on Russian refineries and export restrictions in China. It could also help farmers who rely on trucks to move goods to market and receive fertilizer and supplies. Diesel shot to a record of about $6.50 a gallon last month and stood at $6.3207 per gallon as of October 5, per AAA, down slightly from the all-time high of $6.53 in late September. "This order will also drive down the costs of all goods, including groceries," Trump said at the Nebraska rally, explaining the order will "allow anyone to purchase tax-free red-dyed diesel for any reason." The move lands a month before the November 3 midterm elections, with Trump's approval at a record-low 32 percent in a Reuters/Ipsos poll and Americans most concerned about the high cost of living. — Do you want to see how to make more plays? Do you want to find gains yourself? Unusual Whales helps you find market opportunities through our market tide, historical options flow, GEX, and much, much more. [Create a free account here](https://unusualwhales.com/login?ref=blubber) to start conquering the market with Unusual Whales — ## Options market and stocks to watch Fuel-tax relief and diesel-price moves hit refiners, truckers, and retailers' margins. Watch these names: [VLO](https://unusualwhales.com/stock/vlo/overview): Valero is the largest independent refiner. Diesel spreads and any demand shift from the waiver move the stock directly. [PSX](https://unusualwhales.com/stock/psx/overview): Phillips 66's refining margins live and die on diesel cracks. Watch for unusual call flow around inventory data. [JBHT](https://unusualwhales.com/stock/jbht/overview): J.B. Hunt is a bellwether trucker. Lower diesel costs flow straight to carrier margins. Watch for unusual flow in refiners and transport names around fuel-price reports and state-level matching actions. For more energy coverage, see [other market news here](https://unusualwhales.com/news). Want more market intelligence? [Create your free Unusual Whales account](https://unusualwhales.com/login?ref=blubber) for options flow, market tide, GEX, and the full toolkit.