Trump lets truckers and farmers run tax-free red diesel on highways through Dec. 31. The tax is deferred, not forgiven
President Trump signed an executive order on Oct. 5 that lets dyed diesel, normally restricted to off-road use, be used on highways through Dec. 31, 2026. The Treasury Secretary is directed to defer payment of the federal excise tax on that on-road use for the rest of the year without interest or penalties, and to tell the IRS not to penalize drivers. The White House puts the tax at 24.4 cents a gallon, about $60 on a 250-gallon fill, and says savings could top $100 a fill if states suspend their taxes too. The obligation is deferred into next year; the order asks officials to explore forgiveness, including through legislation. The Agriculture Secretary is to coordinate with co-ops and rural distributors, and states are encouraged to suspend inspections and taxes; Mississippi said it will not enforce the dyed-diesel ban on highways. Agriculture Secretary Rollins projected $640 million in savings for farmers. AAA data show diesel reached a record $6.53 a gallon on Sept. 22, from $3.76 before the Iran war. Trump displayed the order at a rally in Grand Island, Nebraska.
Diesel moves almost everything Americans buy, so its price feeds into groceries and freight within weeks. The order is a fast, temporary lever that avoids Congress, but it shifts the bill into 2027 and depends on states going along. It also lands four weeks before the midterms in farm states where Republicans are defending seats.
If you drive a diesel pickup for work or run a farm, ask your fuel supplier whether red diesel is available and whether your state has waived its own tax and inspections. If not, state penalties still apply. Keep receipts: the federal tax is deferred, so a bill may still come.
Truckers and farmers are paying record prices because of a war they did not start. Waiving penalties on a fuel already in rural tanks is quick relief that costs little to administer.
A deferred tax is a loan, not a cut, and the Highway Trust Fund loses money it was already short of. Mixing untaxed and taxed fuel also invites fraud that the red dye exists to stop.
The test is the states. Federal tax is 24.4 cents; state diesel taxes are often larger, and inspectors who enforce the dye rule are state employees. Watch how many governors follow Mississippi this week. If few do, the relief a trucker sees is closer to $60 a fill than $100, and the deferred bill arrives in January.
DailyDrop U.S. No. 1 · October 5, 2026