What Trump's Diesel Executive Order Will Mean For Your Gas Prices (and the Midterms)
President Donald Trump is touting an executive order that will ease diesel costs after he backed away from a recently threatened diesel export ban, but drivers shouldn’t expect this move to suddenly cut costs at the gas pump.
Trump is expected to direct the Treasury Department to review diesel taxes and urge states to make more tax-exempt red-dyed diesel available to the public. The order will also call for states to consider waiving certain fuel taxes. It’s a measure that arrives after a recent diesel price surge angered farmers and added further inflation concerns just ahead of the midterm elections.
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What This Executive Order Will Actually Do
Per Politico, this executive action will focus on dyed diesel (which is used in agriculture and construction) as well as state fuel taxes. Ten states, representing about a third of U.S. diesel sales, had already moved to expand access to dyed diesel as of October 2.
The Trump administration had previously considered the more aggressive step of restricting American diesel exports, with Trump repeatedly threatening an export ban before finally ruling it out after European countries agreed to release fuel from strategic reserves. That export ban would have directly targeted the amount of diesel leaving America. Instead, Trump’s administration is now pursuing tax relief and wider access to fuel that already receives preferential treatment.
Will Your Gas Prices Come Down?
For gasoline drivers, prices will likely not drop by much in the near term, as this executive order is aimed squarely at diesel.
Patrick De Haan, head of petroleum analysis at GasBuddy, estimated to Politico that wider access to tax-exempt dyed diesel could save on-road diesel users roughly 60 cents per gallon. He also cautioned, though, that taxes are not the central problem for farmers, who already use dyed diesel. He noted that the bigger issue is supply, which makes Trump’s executive order something of a limited solution to expensive fuel prices.
Why This Matters for the Midterms
The timing of Trump’s diesel order is somewhat difficult to separate from the midterm campaign, at a time when the president has already promised $5,000 checks to most American adults if his Republican party maintains control of Congress. High fuel costs have put particular pressure on farmers and truckers, which gives Republicans an immediate political reason to push for relief. Trump can now point to a concrete response, signed during a campaign stop in Nebraska.
The political impact, though, may depend on whether drivers and businesses actually see any real savings prior to Election Day. Farmers already using tax-exempt dyed diesel may get little direct benefit, while truckers may save a little more. If diesel prices remain high, the order may look too limited to those Americans hoping to see benefits.
The Bottom Line
The diesel order gives the Trump administration a hopeful solution to a problem that has become increasingly difficult to ignore in farm country and among Republican lawmakers. It also puts the White House’s approach on record before the midterms, following weeks of debate over how aggressively the Trump administration should intervene.
For drivers, the significance is debatable. The order does not provide a broad reduction in gas prices, and its impact will largely depend on how states respond and whether fuel supplies improve.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on MoneyLion.com.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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