President Donald Trump has taken a major step to shield American truckers and farmers from the high cost of fuel.

On Monday, Trump signed an executive order allowing them to use dyed diesel without paying a federal penalty.

'The president listened to farmers and responded.'

Dyed diesel is a tax-exempt fuel that is intended for off-road use, customarily in farming, manufacturing, construction equipment, and trains. Although identical to standard diesel, it is dyed with Solvent Red 164 so that law enforcement can distinguish it from taxable on-road diesel.

Federal law prohibits the use or holding of dyed diesel unless utilized or held for nontaxable purposes. Each violation carries the penalty of a $1,000 fine or $10 for each gallon of the fuel involved — whichever is greater.

In his order, Trump noted that the agricultural and farming industries have been "particularly hard hit" by restricted global diesel supply and the correlated rising prices. While the White House primarily blamed the Russia-Ukraine war for the recent supply squeeze, the Iran conflict and issues over the Strait of Hormuz have also restricted supply and driven up prices.

Recognizing the need in these industries for "temporary relief," Trump directed Treasury Secretary Scott Bessent "to use his authority to defer certain diesel fuel tax payment obligations and to provide penalty relief to the extent permitted by law." The Internal Revenue Service will hold off on fines for highway use of dyed diesel until Dec. 31, 2026.

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The president also directed Agriculture Secretary Brooke Rollins and Department of Transportation Secretary Sean Duffy to facilitate the implementation of this policy. For his part, Duffy will work with the states and various organizations to optimize access to dyed diesel. Rollins, meanwhile, will work to ensure that farmers can get their hands on fuel in high-demand areas.

The White House claimed in a fact sheet that "this action will put money directly back in the pockets of American farmers, truckers, and workers, for example saving truckers over $100 per refill."

Vice President JD Vance stated, "Another example of President Trump acting quickly to tackle an urgent issue. In this administration, we’re fighting every day to help hard working Americans, especially our farmers."

Trump's order was well received among various farmer groups, lawmakers, and governors.

Iowa Republican gubernatorial candidate Zach Lahn, who claimed to have advised on the EO, said that it "will provide immediate relief and much-needed savings for farmers in Iowa and all over America."

Zippy Duvall, the president of the American Farm Bureau Federation, thanked the president "for recognizing that what happens at the fuel pump directly affects what happens on the farm and therefore at dinner tables across America."

"The federal highway diesel tax is currently more than 24 cents per gallon, so it’s a big deal to farmers to be able to use tax-exempt diesel more broadly to get their harvest to market," added Duvall.

American Soybean Association President Dave Walton similarly praised Trump's policy and noted, "ASA is encouraged by the administration’s continued focus on agricultural affordability."

While Trump's order concerns federal regulations regarding the use of dyed diesel, numerous states have laws on the books concerning its use.

Republican Governors Bill Lee of Tennessee, Tate Reeves of Mississippi, and Kim Reynolds of Iowa are among the governors who rushed to announce that they will order the suspension of their respective states' penalties for on-road dyed diesel use.

Overall, average fuel prices fell last week in 48 states yet remain high. The national average price of gasoline stands at $4.30 per gallon — $1.22 per gallon higher than this time last year. The national average price of diesel stands at around $6.31 per gallon, according to the price-tracking service GasBuddy.

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