Trump signs order to defer diesel tax payments amid rising fuel costs

President Donald Trump signed an executive order on Monday that postpones federal tax payments on red-dyed diesel used on public roads from Oct. 5 to Dec. 31. The order allows taxpayers to defer the 24.4-cent-per-gallon diesel excise tax without interest or penalties, and directs Treasury Secretary Scott Bessent to explore ways to eliminate the deferred amounts.

The measure applies to any purchaser of the dyed fuel, which is otherwise exempt from highway taxes but illegal for on-road use. The White House estimates that a typical 250-gallon fill could save more than $100 where states also suspend the tax.

The deferral comes as diesel prices hover near record levels, averaging $6.32 per gallon, driven by disruptions linked to the Russia-Ukraine conflict and limited refining capacity. The administration also cited a recent G7 agreement to release strategic diesel stocks.

Farmers and trucking operators welcomed the relief. > "Every cent per gallon matters when you're running a fleet of grain trucks or hauling cattle hundreds of miles," said Zippy Duvall, president of the American Farm Bureau Federation.

The order does not cancel the tax; the deferred liability will become due after Dec. 31 unless further action is taken. State officials may also choose to suspend inspections and the tax.

Oil markets responded with modest declines, as Brent crude fell below $100 a barrel and West Texas Intermediate dropped to under $88.