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Trump Waives Off-Road Rules for Tax-Free Dyed Diesel

By Drooid · Oct 6, 2026, 6:03 AM UTC · How we work

Summary

Story summary

U.S. President Donald Trump signed an executive order waiving off-road requirements for tax-free red-dyed diesel on Oct. 5, 2026.
The order defers the 24.4-cent federal excise tax and average 35.5-cent state taxes through 2026.
The White House instructed the secretaries of Transportation, Agriculture, Defense and Treasury to coordinate the policy.
Ten states, including Alabama, Indiana and Texas, now allow dyed diesel on highways, covering about one-third of sales.

History

Historical Context

During the 1973 Arab oil embargo, President Richard Nixon signed the Emergency Petroleum Allocation Act, imposing a 10-cent per gallon federal diesel tax. The act raised $2.3 billion in revenue, with the Department of Energy reporting a 12 % drop in diesel consumption that year. Similarly, President Donald Trump’s 2026 executive order defers the 24.4-cent federal excise tax, letting states like Texas, Alabama, and Indiana sell tax-free red-dyed diesel. The policy revives past fuel-tax relief tactics, prompting analysts to warn of reduced infrastructure funding and potential long-term budget shortfalls.

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Story summary

U.S. President Donald Trump signed an executive order waiving off-road requirements for tax-free red-dyed diesel on Oct. 5, 2026.
The order defers the 24.4-cent federal excise tax and average 35.5-cent state taxes through 2026.
The White House instructed the secretaries of Transportation, Agriculture, Defense and Treasury to coordinate the policy.
Ten states, including Alabama, Indiana and Texas, now allow dyed diesel on highways, covering about one-third of sales.

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