US President Donald Trump has issued an executive order to ease the financial burden caused by rising diesel prices. Farmers, truckers and other diesel-dependent industries will benefit from the temporary tax relief.

The executive order was signed on October 5 by Trump at a campaign stop in Grand Island, Nebraska. The administration said it aims to make diesel cheaper for Americans.

More Tax Free Red Diesel

• The executive order means there will be a temporary increase in the availability of tax-free red diesel.
• The order instructs the US Treasuries to postpone payment of federal diesel fuel tax until the end of 2026, where legally possible there will be no interest or penalties. It also asks for a relaxation of enforcement on the use of dyed diesel on highways.
• Red diesel is very similar to normal diesel, however it is dyed to make it clear that this type of diesel is usually used off road and therefore does not have to pay fuel duty on highways.

Millions For Farmers

The White House said this would give much needed relief to farmers and truckers who are paying high fuel prices.

The US Department of Agriculture said it is expected to result in $640 million in federal and state savings across approximately 224.6 million harvested acres.

Trump also said it could save truckers over $100 on their usual top up if they follow the same measures at a state level. The administration hopes this will mean that the reduced fuel prices will bring down transport costs.

High Fuel Prices

The executive order comes after diesel prices have been much higher than they were a year ago. On October 5 the average price of diesel per gallon in the US was around $6.32 (Times of India). This was a decrease from last week.

Prices have increased due to supply chain issues and geopolitical issues.

No Ban On Exporting Diesel

This comes after weeks of talk in the Trump administration about increasing the amount of diesel available.

Trump had previously thought about more drastic measures, such as putting limits on exporting diesel. However he has now ruled out a complete ban on exporting. European countries are moving towards releasing diesel from strategic reserves.

Instead the administration is focusing on tax relief, making more dyed diesel available and working with states and fuel providers.

What Does The Order Mean?

• The executive order is meant to give short term relief to the US. The Treasury, Agriculture and Transport departments have been told to work together on this policy.
• American farmers and truckers may see benefits from the reduced tax on their fuel. However energy analysts have warned that this may not fully resolve the issue with supply.
• The administration hopes that by making diesel cheaper, it will reduce costs on agriculture and transport and can help bring down inflation on food and other goods.