As of about 1:30 a.m. EDT Tuesday, Oct. 6, 2026, President Donald Trump has signed an executive order on diesel fuel taxes, and its text is narrower than the way he described it at a Nebraska rally. The order, dated Oct. 5, tells the Treasury Secretary to decide within 5 days whether relief is authorized under 26 U.S.C. 7508A, whether a qualifying event has occurred and which taxpayers have been affected, and, only if he makes those determinations, to defer payment of certain diesel taxes for those taxpayers. Separately, within the same 5 days, it tells the Secretary to direct the IRS to announce that it will not impose certain penalties for dyed diesel used on highways. Section 3 then calls for guidance that identifies the specific relief and “any conditions on such relief.” The order, the White House fact sheet, NBC and Fox Business do not show that Treasury or the IRS has acted yet, and the IRS and Treasury newsrooms showed no such announcement as of about 1:30 a.m. EDT, with the latest IRS items dated Oct. 2 and the latest Treasury item dated Oct. 5.
What Trump said and what he signed
Trump said at a rally in Nebraska on Monday evening, Oct. 5, according to NBC News: “Tonight I’m going to sign a historic executive order to officially waive the off-road requirement and allow anyone to purchase tax-free red dye diesel for any reason.” NBC reported that he said this after telling the audience he didn’t “know what the hell” red dye diesel is. Fox Business places the remarks in Grand Island, Nebraska, and quotes Trump as saying, “They’re going to be very happy in about two seconds.” Fox also quoted him: “I’m going to do what Joe Biden couldn’t do,” Trump said. “Sign his signature.”
NBC reported that Trump said the order will save typical truckers more than $100 every time they fill their tanks and will drive down other costs, including groceries. The White House fact sheet repeats the estimate as “saving truckers over $100 per refill” and does not show how it was calculated. Fox Business described it as the administration’s estimate.
The order itself is dated Oct. 5, 2026. NBC wrote that Trump “signed an executive order Monday,” and the White House fact sheet says “Today, President Donald J. Trump signed an Executive Order.” None of these pages gives a time or place of signing, so this article does not say where or at what hour the order was signed. NBC’s report was published at 9:48 p.m. EDT and Fox Business’s at 9:28 p.m. EDT on Oct. 5, so both are several hours old.
What the order text directs
The order is titled “Emergency Tax Relief on Diesel Fuel.” It is an instruction to federal agencies, and its main steps are not all conditional in the same way.
- Treasury determination, then deferral. “Within 5 days of the date of this order,” the Treasury Secretary, in consultation with the Secretary of War as appropriate, “shall determine whether relief is authorized under 26 U.S.C. 7508A, including whether a qualifying event has occurred and which taxpayers have been affected by that event.” Only “if the Secretary makes those determinations” does the order tell him to defer, “to the extent authorized by law,” payment “by those taxpayers” of the taxes imposed by 26 U.S.C. 4041(a)(1)(A) or 4041(b)(1)(B) that are incurred from Oct. 5 through Dec. 31, 2026. The deferral is to be “without any penalties, interest, additional amount, or addition to the tax.” The White House fact sheet calls this “the applicable Federal excise tax” and, elsewhere, “the Federal excise tax imposed for on-road use of dyed diesel fuel.” The order does not say which event it treats as the qualifying one; that is left to the Secretary’s determination.
- A separate IRS announcement. Also within 5 days, the Secretary “shall direct the Internal Revenue Service to announce that it will not impose a penalty under 26 U.S.C. 6715 (a)(1) or 26 U.S.C. 6715 (a)(2), when dyed diesel fuel is sold for use or used on the highway” from Oct. 5 through Dec. 31, 2026. The announcement is also to address relief from penalties for failing to make semimonthly deposits of the tax. Unlike the deferral, this step is not tied in the text to the 7508A determination; its terms are left to guidance. IRS Publication 510 (revised December 2025) describes the dyed-fuel misuse penalty this way: “The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved.”
- Guidance. Section 3 says guidance “shall identify the specific relief being granted and any conditions on such relief,” including “the date by which postponed taxes must be paid.”
- Possible elimination of the deferred tax. Section 4, headed “Tax Forgiveness,” says the Secretary “shall explore avenues, including legislation, to eliminate the obligation to pay the amounts deferred.”
- Treasury and inspections. Section 5 tells Treasury to assess how the IRS should allocate resources to inspections of vehicle fuel tanks and fuel sampling during any relief period, and to announce that decision publicly.
- Transportation enforcement stays. Section 6 tells the Transportation Department to coordinate with states, industry and labor and to “continue all compliance enforcement measures, including audits, inspections, and monitoring programs, as provided for by law.”
- Agriculture. Section 7 tells the Agriculture Department to coordinate with co-ops and rural distributors “to ensure adequate distribution of dyed diesel for their use in high-demand areas” and to encourage “corresponding State action to further the policies of this order.”
- States. Section 8 tells the White House Office of Intergovernmental Affairs to engage states to “adopt policies that correspond” to the Secretary’s exercise of authority, “in accordance with applicable law.”
The order also says it is to be “implemented consistent with applicable law and subject to the availability of appropriations,” and that it does not create any right or benefit enforceable at law.
How the order has been described, and what its text says
The wording differs depending on who is describing it.
- Trump, at the rally: anyone can buy tax-free red dye diesel “for any reason.”
- NBC’s headline: Trump “opens tax-exempt ‘red dye’ diesel to all drivers.”
- Fox Business’s opening line: Trump is “signing an executive order that temporarily lets them fill up with red-dyed diesel normally barred from highway use,” where “them” refers to truckers. Later, Fox writes that “The order allows off-road diesel on highways and defers the federal excise tax through year’s end without interest or penalties, according to the White House.”
- The White House fact sheet: the order will “temporarily allow off-road ‘dyed’ diesel for highway use and defer the applicable Federal excise tax.”
- The order itself: a Treasury determination followed, if made, by a deferral of payment; and an IRS announcement that it will not impose specific penalties for highway use of dyed diesel. The order contains no sentence that itself declares dyed diesel legal on roads.
Fox Business also drew the line between Trump’s words and the text: “Trump called the fuel ‘tax free,’ but the order postpones the federal tax payment while directing Treasury officials to explore eliminating the deferred bill.” Exploring is not the same as eliminating, and the order, the fact sheet, NBC and Fox Business do not say the tax has been cancelled.
Why dyed diesel is cheaper, and why it is dyed
The White House fact sheet explains that diesel is taxed according to its intended use. In its words, “‘On-road’ or highway diesel is subject to state and federal excise taxes. Diesel used for off-road purposes, such as agricultural, construction, or heating, is not taxed.” It adds that off-road diesel “is dyed red so that law enforcement can identify it to enforce penalties and back taxes for on-road use.”
NBC gave a similar account: diesel for farm vehicles and machinery is typically tax-free and dyed red “so regulators and inspectors can tell it apart from road diesel.”
On the federal rate, IRS Publication 510 (December 2025) says: “The tax on diesel fuel and kerosene is $0.244 per gallon,” and “Only the $0.001 LUST tax applies to dyed diesel fuel and dyed kerosene.” A FOX 13 explainer published Oct. 1 describes the same total as 24.3 cents per gallon plus a 0.1-cent-per-gallon fee for underground storage tanks.
On whether road use is allowed today, the pages differ in what they say. The order text does not itself declare road use legal. The White House fact sheet and Fox Business describe the order as allowing it. The IRS announcement the order calls for does not appear in the order, the fact sheet, NBC, Fox Business, or the IRS and Treasury newsrooms as of about 1:30 a.m. EDT. The FOX 13 explainer, published Oct. 1, before the order and based primarily on Reuters reporting and Energy Information Administration data, put the rule at that time plainly: “Using dyed diesel in vehicles driven on public roads is illegal and can result in significant fines because it is considered tax evasion — not because the fuel is materially different from regular diesel.” This article is not advice to put dyed fuel in a road vehicle.
What is still not known
- Whether Treasury or the IRS has acted. The order sets a 5-day window. No IRS or Treasury announcement appears in the order, the fact sheet, NBC or Fox Business, and none was on the IRS or Treasury newsrooms as of about 1:30 a.m. EDT.
- What the conditions will be. The order leaves “any conditions on such relief” to later guidance. For comparison, an IRS news release dated May 13, 2021 (IR-2021-108) granted dyed-diesel penalty relief in 13 jurisdictions, retroactive to May 7, 2021 and running through May 21, 2021, after a fuel-supply disruption. It said “the relief is available only if the operator or the person selling such fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use.” The 2026 order does not say whether a similar condition will apply.
- State taxes. The White House fact sheet says: “The Administration, and State Governors, can exercise their enforcement discretion to halt inspections and waive the tax liability that users would face for on-road use of dyed diesel.” Fox Business reported that “State tax relief would require corresponding action.” The FOX 13 explainer said on Oct. 1 that “Several states have eased restrictions on dyed diesel as fuel costs continue to rise.” The order itself does not change state taxes; it asks Agriculture and the White House intergovernmental office to encourage and engage states.
- Whether the deferral becomes a cancellation. The order sets a payment-due date in future guidance and asks Treasury to explore ways to eliminate the deferred amounts, including legislation.
- The effect on pump prices. The $100-per-refill figure is an estimate from Trump and the White House. None of the order, the fact sheet, NBC or Fox Business gives an independent calculation of it.
The price context
NBC reported, citing AAA, that diesel hit an all-time high of $6.52 a gallon on Sept. 22, and that average prices have declined slightly since. AAA’s own fuel prices page, as of early Oct. 6, lists the highest recorded diesel average as $6.5276 on 9/22/26, and a current national average of $6.3207, down from $6.3434 a day earlier and $6.4531 a week earlier. The FOX 13 explainer, using Energy Information Administration data, reported a record of $6.53 a gallon “last week”; that is a different price series from AAA’s daily average, though the two are close. Since the Iran war began on Feb. 28, NBC said, diesel prices are up more than 70%. NBC also reported that Brent crude is up almost 45% and unleaded gasoline up 50% over the same period.
The White House order says that “Restricted global diesel supply has led to rising prices.” NBC reported that Ukraine’s drone strikes on Russian refineries led the Kremlin to ban diesel exports “at least through the end of this month,” meaning through the end of October, and that Transportation Secretary Sean Duffy announced in September that the Transportation Department would ease rules on how many consecutive hours fuel truck drivers can work, for 90 days. The White House fact sheet gives its own explanation, citing the Russia-Ukraine war and a lack of refining capacity worldwide, “including Democrat-led States that chose to shut down their refineries,” as its wording has it; Fox Business summarized that as the White House blaming refinery closures in Democrat-led states on green energy policies.
The fact sheet also says that in October 2026 Trump negotiated with Europe to release 100 million barrels of refined diesel from strategic reserves over four months. That is a White House claim; Fox Business repeats it as the White House’s statement, and neither page gives independent confirmation.
What analysts said before the order
These comments were made in the FOX 13 explainer on Oct. 1, about the idea of expanding access to dyed diesel, before the order was signed. They are not reactions to the signed text.
- Tom Kloza, chief energy adviser at Gulf Oil, said: “One doesn’t have to pay federal and state excise taxes on dyed diesel, but it really doesn’t shift the amount of overall diesel manufactured for domestic purposes.”
- Gregg Ibendahl, an agricultural economics professor at Kansas State University, said: “It would help less than it sounds like, and the version the administration can do without Congress wouldn’t lower pump prices at all.”
- Preben Sørli, an analyst at Rystad Energy, said: “While expanding access to the tax-exempt diesel could provide some relief to eligible end-users, it would not change the underlying wholesale diesel price.”
What to watch next
- About Oct. 10. Five days from Oct. 5 puts the Treasury determination and the IRS announcement due around Oct. 10, counting from the order’s “within 5 days.”
- The wording of any IRS announcement. It should show whether relief applies to all dyed-diesel users or only those who meet conditions, whether the highway tax must still be paid, and the date deferred taxes come due.
- Treasury’s inspection decision. The order requires Treasury to announce publicly how the IRS will allocate resources to fuel-tank inspections and fuel sampling during any relief period.
- State action. The order does not change state taxes, so governors and state governments would have to act separately.
- Pump prices. The AAA record is $6.5276, set Sept. 22, and AAA’s national diesel average was $6.3207 on AAA’s page early on Oct. 6. Kloza said before the order that expanded access does not shift the amount of diesel produced; Ibendahl said the version the administration can do without Congress would not lower pump prices at all; Sørli said it could give some relief to eligible end-users but would not change the underlying wholesale price. Whether the order changes anything at the pump is not yet known.