US President Donald Trump on Monday (local time) signed an executive order aimed to ease the burden of high diesel prices on farmers, truckers and other businesses, as fuel costs continue to put pressure on Republicans ahead of the November midterm elections.Trump announced the move during a campaign stop in Grand Island, Nebraska, saying that loosening limits on the tax-free use of red-dyed diesel would save farmers “millions” and help bring down the cost of goods and groceries.“Pete and Jim, this should absolutely ensure your election, I guarantee you that,” Trump said, addressing Republican governor Pete Ricketts and governor Jim Pillen.The order directs states to increase the availability of tax-exempt red-dyed diesel, which is used in farming, construction and other industries. It also calls on states to consider waiving certain fuel taxes and includes so-called non-enforcement of dyed diesel limitations.Red-dyed diesel is exempt from federal and state excise taxes. The administration says that temporarily easing restrictions would reduce costs for businesses that depend on diesel.“The typical trucker will save more than $100 every time they fill up,” Trump said as he signed the order before a crowd in Grand Island.“Farmers will also save millions and millions of dollars, and this order will also drive down the cost of all goods and to go to grocery prices very substantially.”The steps also include the treasury department reviewing certain taxes on diesel.Ten states accounting for roughly a third of US diesel sales had already taken steps to allow wider use of dyed diesel by Friday, according to research firm ClearView Energy Partners, cited by Politico. Several states had also waived taxes on diesel used in agricultural vehicles.
Diesel still costs well above last year
The move comes as diesel prices remain sharply higher than a year ago.The average price of diesel fell to $6.32 a gallon on Monday, down 13 cents from the previous week but still $2.63 higher than a year ago, according to AAA.Fuel prices have surged amid the ongoing war against Iran and Ukrainian attacks on Russian refineries. The conflicts have contributed to a significant decline in the amount of diesel available on the global market.Exports of American diesel have also risen to record levels since the US and Israel launched a war with Iran in February and Ukraine began targeting Russian refineries.
Trump drops diesel export ban
The red-dyed diesel measure follows weeks of uncertainty over how the administration would respond to rising fuel prices.Trump had repeatedly backed an outright ban on diesel exports as agriculture-state Republicans, including Iowa Senator Chuck Grassley, pushed for action to lower costs for farmers.Energy secretary Chris Wright and White House energy advisers had been working on alternatives.But on Friday, Trump ruled out a diesel export ban and said he had never really considered one, after Europe agreed to release fuel from its diesel reserves.Agriculture secretary Brooke Rollins said Monday morning that Trump would announce additional short-term relief for farmers in Nebraska and that she would also discuss the issue during a stop in Iowa.High fuel and grocery prices have become a major concern for rural voters, many of whom have backed Trump and Republicans in recent elections. Nebraska farmers and ranchers have also been angered by the administration’s plan to allow more imports of foreign beef.
