- President Trump signed an order allowing red-dyed diesel on highways through December thirty-first, twenty twenty-six.
- The order defers the federal tax of twenty-four point four cents per gallon; it does not yet cancel the tax owed.
- A two-hundred-fifty-gallon fill could save about sixty-one dollars federally, while extra savings depend on state action.
President Donald Trump signed an order on October 5, 2026, allowing tax-exempt red-dyed diesel on public highways and postponing collection of the federal highway diesel excise tax. The measure, titled “Emergency Tax Relief on Diesel Fuel,” runs through December 31, 2026.
The order changes how the fuel may be used on roads. It does not yet cancel the tax owed.
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Treasury must delay collecting the federal tax through the end of the year. No interest or penalties will accrue during that period, and the administration has asked Treasury to consider eliminating the deferred obligation.
Trump said the move is intended to cut transportation costs and prices for goods, including groceries. The administration singled out truckers, farmers and ranchers, loggers, construction operators and other commercial fleets.
The federal tax relief is a deferral, with savings of about $60 on a typical fill
The federal diesel levy is 24.4 cents per gallon. At that rate, a 250-gallon fill would avoid about $61.00 in federal tax while collection is deferred. The White House described the saving as “about $60.”
State tax cuts could add to the reduction. The White House says savings could top $100 per fill if states also suspend their diesel taxes.
That figure depends on state action. The federal order encourages agencies to work with states on suspending local diesel taxes and widening fuel availability, but it does not itself change every state’s rules.
State rules still determine whether drivers can use the fuel
Dyed diesel has the same chemical composition as ordinary highway diesel, apart from its dye. It is generally sold without tax for off-road work, including farming, construction and heating.
The dye gives inspectors a way to spot fuel used on roads outside the rules. Under the new federal order, drivers may use it on public highways during the temporary period, but state restrictions and taxes remain a separate matter.
States set their own fuel taxes and highway-use requirements, so the legality and savings can differ from one state to another. The White House has urged states to follow the federal move. Arkansas Gov. Sarah Huckabee Sanders is among the governors who have suspended state taxes on dyed fuel.
Long-haul truckers and working fleets are among the groups the administration expects to benefit. The lower federal charge could also reduce costs for farmers and ranchers, loggers and construction operators, though any additional state savings depend on local decisions.
The order remains in effect through December 31, 2026, unless the administration extends or replaces it. Congress could also pass legislation forgiving the deferred taxes.
