Trump pushes tax and supply measures to curb rising fuel prices ahead of midterms
President Donald Trump has announced temporary tax relief for dyed diesel and urged state tax cuts while the G7 released oil stockpiles, aiming to ease gasoline and diesel costs as elections approach.
Fuel prices in the United States have more than doubled since the conflict in the Middle East began in February, pressuring transport firms, farmers and drivers. With the midterm elections only weeks away, President Donald Trump has highlighted gasoline and diesel costs as a priority.
At a campaign stop, Trump announced a waiver allowing red-dye diesel, normally taxed for off-road use, to be sold for highway use without federal levies. Pricing manager David Ruisard explained that the only difference between the taxed fuel and the dyed version is the dye, which is difficult to remove from vehicle tanks and can lead to fines for tax evasion.
The administration also urged states to lower gasoline taxes; Ohio and Georgia have already reduced their rates, which analysts say modestly lowers pump prices. Trump has floated the idea of suspending the federal gasoline tax, though such a change would require congressional approval.
Internationally, the G7 agreed to release 100 million barrels of oil and diesel from strategic reserves after pressure from the White House. GasBuddy analyst Patrick De Haan said the announcement helped push prices down, but economists warned the relief is likely temporary as Middle East supply disruptions persist.
"The combined impact of higher rates and higher energy prices is squeezing household budgets and adding to firms' costs," said Michael Pearce, chief U.S. economist at Oxford Economics.
Analysts note that while the flow of crude oil has nearly returned to pre-conflict levels, prices remain above $100 a barrel, and the ongoing Russia-Ukraine war continues to affect supply. Ruisard estimated that about 60 % of the recent diesel price increase is linked to the Strait of Hormuz disruption, with the remaining 40 % tied to the Ukraine conflict.
Experts caution that even if geopolitical tensions ease, damaged facilities in the region could keep production below normal for several months, meaning elevated fuel prices are likely to persist in the near term.