• President Trump signed an executive order on October 5 to expand access to red-dyed diesel and defer federal excise taxes, but prices remain near record highs.
  • Industry groups warn that the measure provides limited relief due to infrastructure and regulatory obstacles.
  • Trump promised another "big announcement" on diesel on October 9, but details remain scarce.

Relief Elusive as Diesel Stays Above $6 a Gallon

President Trump’s executive order aimed at lowering diesel costs has yet to deliver meaningful relief at the pump, with prices still hovering near record levels and industry stakeholders pointing to significant implementation hurdles.

The order, signed on October 5 in Grand Island, Nebraska, directs the Treasury Department to defer the federal excise tax on on-road use of dyed diesel through year-end without interest or penalties, and to explore eliminating the deferred tax obligation altogether. It also tasks the Transportation Department with coordinating access with states and industry, and the Agriculture Department with protecting farmers’ access in high-demand areas.

Yet as of October 9, the average U.S. diesel price stood at $6.28 a gallon, according to AAA data cited by Reuters—roughly 70% above the level before the U.S.-Israeli war on Iran began. The elevated price underscores the limitations of tax relief in the face of a tight global refined-products market.

Deferral Is Not Forgiveness

The distinction between deferral and forgiveness is central. The order does not establish permanent tax forgiveness; it merely delays collection. The federal excise tax on diesel is 24.4 cents per gallon, which at current prices represents about 3.9% of the pump price—meaningful for fuel-intensive businesses but small relative to the overall price surge.

The American Trucking Associations emphasized that temporary penalty relief and potential tax deferral are not outright tax forgiveness. Actual savings depend on retailer participation, state taxes, access costs, and whether deferred federal liabilities are eventually forgiven.

"What institutional investors like us are really focused on is regulatory stability," said Andrea Valeri, Blackstone’s country chairman for Italy and chief investment officer for Blackstone (BX)Credit and Insurance’s private credit business in Europe and APAC, at a recent conference. While his comments were about Italy, the sentiment echoes broader concerns about policy uncertainty.

Industry Cites Infrastructure and Compliance Challenges

Farmers, trucking groups, and fuel retailers have reported practical obstacles since the order was signed. Differing state rules, uncertain tax liabilities, and unsuitable fueling infrastructure are among the key issues.

"Most reputable retailers and marketers were unlikely to distribute dyed fuel through the newly encouraged highway channels under the prevailing uncertainties," said David Fialkov, president of NATSO, which represents travel centers and truck stops.

GasBuddy analyst Patrick De Haan warned that an interstate carrier may encounter a patchwork of legality and penalties across its route. "It’s much more of a convergence between the two solutions," said Cecile Mayer-Levi, head of private debt activity at Tikehau Capital SCA, referring to partnerships between banks and private credit funds in Italy. While her comments were about private credit, the analogy of fragmented frameworks applies to the diesel market.

For independent truckers, the stakes are high. Todd Spencer, president of the Owner-Operator Independent Drivers Association, estimates that each $1-per-gallon increase adds about $400 a week to an independent trucker’s costs.

Farmers See Limited Benefit

Many farmers already use tax-exempt dyed fuel in tractors and combines, limiting their incremental benefit from the order. Farmers hauling livestock or produce on public roads may benefit more, while those who have completed harvest may receive little timely relief.

Michigan State University food-policy economist David Ortega warned that expanded demand for dyed diesel could backfire for farmers by increasing competition for their existing fuel supply. University of Wisconsin–Madison economist Paul Mitchell highlighted another obstacle: not every dyed-diesel station can accommodate large trucks.

Political and International Context

The intervention comes before the November 3 congressional elections, with Republicans defending narrow majorities. Cost of living is voters’ leading concern, and expensive diesel particularly pressures farmers, truckers, and rural voters—important Republican constituencies.

Internationally, the administration has pursued coordinated emergency releases. G7 countries agreed to release 100 million barrels of oil and petroleum products, but Reuters (TRI)reports a dispute over how much represents genuinely additional supply, as much appears to overlap with remaining commitments from a March International Energy Agency release.

A diesel export ban is not currently the announced policy. After supporting the idea in September, Trump said on October 2 that he would not authorize one. Energy Secretary Chris Wright had warned that an export ban could reduce refinery throughput and raise gasoline and jet-fuel prices.

What’s Next

Trump promised additional diesel news on October 9, but the available report does not identify the proposed measure, its timing, or its legal mechanism. It should not be treated as an enacted policy.

Baringa economist Caspian Conran characterized the measures as potentially offering "a few weeks of relief," rather than a durable solution. Longer term, sustained improvement depends more on restored supply flows and refining availability than on tax treatment alone.

Rapidan Energy Group president Bob McNally argues that a durable end to the Gulf and Russia–Ukraine conflicts—or a recession that sharply reduces consumption—is what could put prices on a strong downward trajectory. Kansas State University farm-management specialist Gregg Ibendahl offers a cautious supply outlook: restoring global availability could take at least a year even under favorable conditions.

Correction: An earlier version of this article misstated the date of Trump's executive order signing. It was October 5, not October 6.