Trump defers diesel tax for truckers as fuel costs bite weeks before US midterms

Truckers, farmers and other diesel users in the US could benefit from deferred tax payments on fuel normally reserved for tractors and other off-road machinery, as the White House moves to ease a fuel squeeze that threatens to hurt the Republican Party in the midterm elections next month.

US President Donald Trump signed the order on Monday at a rally in Grand Island, Nebraska, where he was campaigning to fire up Republican voters.

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."

Trump also conceded he was no expert on the fuel. "I don't know what the hell it is, but whatever it is, it's supposed to be very good," he joked.

The dyed fuel is almost identical to ordinary diesel but is exempt from highway taxes, and using it on public roads normally carries penalties.

"The federal diesel tax is 24.4 cents per gallon, or about $60 on a 250-gallon fill," the White House stated in a press release, adding that savings would top $100 per fill where states follow suit. For a large truck taking on 250 gallons, a fill costs about $1,580 including tax at Monday’s average diesel price.

However, the order itself is narrower than Trump's pitch to the crowd suggested.

It does not abolish the levy but postpones payment on dyed diesel used on roads between 5 October and 31 December, free of interest and penalties, and asks US Treasury Secretary Scott Bessent to find ways, including legislation, to "eliminate the obligation to pay the amounts deferred," the executive order said.

It relies on a law that lets the US Treasury postpone tax deadlines for people affected by disasters or military action, and gives Bessent five days, in consultation with US Secretary of War Pete Hegseth, to determine whether those conditions are met and which taxpayers qualify.

Unless the Trump administration finds a way to cancel it, the deferred diesel tax will still be owed once the relief period ends on 31 December.

While the White House has pitched the measure at truckers and farmers, the order itself does not single them out, in line with Trump's promise that anyone could buy the fuel. In practice, the relief matters mainly to those running diesel trucks and farm vehicles, as most American cars run on petrol.

Federal authorities and state governors may also choose to suspend inspections and drop the tax, the White House added.