Trump expands access to tax-exempt diesel amid price surge

US President Donald Trump has signed an executive order expanding access to tax-exempt diesel as high fuel prices put pressure on consumers, farmers and businesses across the country.

Trump announced the measure during a rally in Nebraska on Monday, saying the temporary policy would make it easier for people to obtain dyed diesel, a fuel commonly used in agriculture and for off-road vehicles.

The order allows wider access to the fuel by suspending the usual requirement that dyed diesel be used only for off-road purposes. The fuel is identifiable by its red dye and is normally subject to different tax rules than diesel used on public roads.

Under the directive, the US Treasury secretary, in consultation with the defence secretary, will defer federal excise taxes on the on-road use of dyed diesel through the end of the year. The administration will also examine options for potentially removing the obligation to pay those deferred taxes.

The order further instructs the Agriculture Department to help farmers obtain dyed diesel in areas facing high demand. The Transportation Department has been asked to work with state authorities, industry representatives and labour groups to improve access.

Diesel prices have surged sharply in recent weeks, reaching about $6.50 per gallon at their peak last month. The increase has raised costs for trucking, farming and other industries that depend heavily on diesel fuel.

The administration has linked the fuel market pressures to disruptions caused by conflicts involving Iran and Russia, including attacks affecting energy infrastructure and refineries.

The move comes ahead of the US midterm elections in November, when fuel and living costs are expected to remain important issues for voters.

Trump said he hoped the temporary measure would not be needed for long as the administration works to ease pressure on fuel supplies and prices.