United States President Donald Trump has signed an executive order allowing drivers to use red-dyed diesel on public roads under relaxed tax rules.
Red-dyed diesel is normally reserved for farm machinery and other off-road equipment and is sold without the taxes applied to regular road diesel.
Trump announced the measure at a rally in Nebraska on Monday, saying the order would allow drivers to purchase the fuel tax-free.
However, a White House fact sheet cited by AFP outlined a narrower policy.
Under the order, Treasury Secretary Scott Bessent, in consultation with Defence Secretary Pete Hegseth, will defer taxes owed on dyed diesel used on public roads until the end of the year without interest or penalties.
The Treasury is also expected to explore options for eliminating the tax liability completely.
The order gives federal authorities and state governors discretion to suspend inspections and waive tax obligations that drivers would otherwise incur when using the fuel on public roads.
The White House attributed rising fuel prices to the Russia-Ukraine war and a global shortage of refining capacity. It also blamed refinery closures in Democratic-led states for contributing to higher prices.
Trump’s decision comes as rising diesel and petrol prices put pressure on his Republican Party ahead of the US midterm elections.
At the Nebraska rally, Trump also highlighted an agreement with Europe to release 100 million barrels of refined diesel from strategic reserves over four months.
US diesel prices have risen above $6 per gallon in recent weeks, while Russian export restrictions following Ukrainian attacks on its fuel infrastructure have added pressure to global markets.
