Trump plans new directive to control diesel costs, sources say
Three industry sources say the move follows a week in which diesel hit record highs of more than $6 a gallon and the White House moved to ease the fuel tax burden on truckers and farmers.
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President Trump plans to issue a directive to federal officials aimed at controlling the cost of diesel, according to three industry sources.
The plan follows an executive order Trump signed Monday that instructed Treasury Secretary Scott Bessent to defer certain diesel fuel tax payments and offer penalty relief where the law allows, NBC News reported. That order did not waive the 24.4 cents per gallon federal diesel tax itself, which adds about $60 to a 250-gallon fill, since only Congress can eliminate a tax, according to the White House. The same order authorized highway use of red-dyed diesel, normally restricted to off-road use, after Trump cited diesel prices that had climbed above $6 a gallon, the New Jersey Monitor reported. Agriculture Secretary Brooke Rollins followed by urging state governors to adopt the same suspension of penalties on dyed diesel, the New Jersey Monitor reported.
Retail diesel averaged $6.30 a gallon nationally as of around October 7, according to AAA data cited by CNBC, after setting a record high in September. Rollins said this week that an injection of 100 million barrels of oil from G7 countries had already begun pulling prices down, pointing to AAA figures showing the national average had fallen by $0.13 a gallon over the prior week, the New Jersey Monitor reported. Diesel futures fell briefly after Monday's order before reversing, and were up more than 1% by Wednesday, CNBC reported.
The new directive would extend that effort from a narrow tax exemption into a broader federal push to manage diesel pricing directly. Trump has separately pointed to refinery capacity, rather than crude supply, as the source of high fuel costs, and an analyst cited by CNBC said the bottleneck remains refineries rather than oil availability, so a directive focused on diesel pricing itself would sidestep the constraint the administration has already identified. Trump abandoned an earlier idea of banning diesel exports after pushback from the oil industry and concern it would push up gasoline prices, CNBC reported. The latest push also comes as Trump prepares to travel to Iowa with promises of support for farmers, tying the diesel issue to a constituency central to the November 3 midterm races in farm states.