President Trump is trying to lower diesel prices by expanding the use of red-dyed fuel and waiving some federal diesel taxes. Critics question whether the moves will make a meaningful difference at the pump.
The measures, announced in an executive order Trump signed Oct. 6, came as the national average price of diesel reached $6.30 per gallon on Oct. 7, according to AAA. That was up from $5.90 on Sept. 7 and $3.68 on Oct. 7, 2025.
Critics say the red-diesel move could save truckers less than 25 cents per gallon while prices remain above $6. Patrick De Haan, head of petroleum analysis at GasBuddy, said most drivers would not benefit because states still enforce their own rules, the fuel is not entirely tax-free and the order does not add supply.
What Is Red-Dyed Diesel, and Will It Lower Prices?
Red diesel is regular diesel dyed to mark it as tax-exempt, according to ScienceInsights.com. Before Trump’s order, its use was limited to off-road vehicles such as farm equipment.
The federal government typically collects more than 24 cents per gallon in taxes on diesel purchases, compared with 18.4 cents per gallon on regular gasoline. Trump’s order calls for the federal diesel tax to be suspended through the end of the year.
The White House said suspending taxes on diesel purchases would provide immediate relief to truckers. In a fact sheet, it said the action could save truckers more than $100 per refill. De Haan, however, said the move would likely do little to bring down diesel prices.
He said the order may bypass the need for Congress to act on the 24.4-cent-per-gallon diesel tax, but complications and uneven enforcement could prevent the entire national fleet from benefiting.
Why Does Diesel Cost More Than Regular Gas?
Diesel was historically cheaper than gasoline, except during especially cold winters when demand for diesel and heating oil rose. The trend began reversing around September 2004, according to the U.S. Energy Information Administration, which points to several factors:
- Higher global demand, particularly in Europe, China, India and the United States.
- Higher production and distribution costs as the U.S. shifted to lower-sulfur diesel fuels.
- A higher federal tax on on-highway diesel: 24.40 cents per gallon, about 6 cents more than the tax on regular gasoline.
Why Do High Diesel Prices Matter to Consumers?
Nearly 73% of the nation’s freight was moved by diesel trucks in 2024, the latest figure publicly available from the American Trucking Associations. That amounted to 1.27 billion tons of freight, increasing fuel costs for shipping companies.
Consumer advocates say higher diesel costs can add to the prices families pay for everyday goods, including food and clothing, because those products need to be transported. David Holt, president of the Consumer Energy Alliance, said higher fuel costs can compound the pressure of inflation on household budgets.
What Other Steps Have Been Taken to Lower Fuel Prices?
The administration has made other efforts to address fuel prices this year. In July, the White House promoted the launch of 25 Freedom Fuel gas stations in the Northeast, selling gas for $3.47 a gallon. The stations were concentrated in Pennsylvania and New Jersey and appeared to have little effect on prices statewide. On Oct. 7, regular gas averaged $4.55 per gallon in Pennsylvania and $4.28 in New Jersey; diesel averaged $6.54 and $6.35, respectively.
Trump has also pressured retailers to lower pump prices and urged Congress to pass legislation allowing higher-ethanol gasoline. De Haan said fuel prices could remain elevated while the military conflict in the Middle East continues, leaving motorists facing continued volatility.
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