Trump to Announce Plan Monday Easing Use of Tax-Exempt Red-Dyed Diesel Amid Surging Fuel Prices

President Donald Trump is set to unveil a plan on Monday to ease the use of red-dyed diesel, a tax-exempt variety of the fuel normally restricted to off-road and agricultural applications, according to officials cited by Bloomberg.

Red-dyed diesel is exempt from the federal highway diesel tax of 24.4 cents per gallon and is typically sold for use in farm equipment, construction vehicles, forklifts, diesel generators, and heating systems. Broadening its use for general consumers would effectively lower the tax burden on diesel, though it would not increase the physical supply of the fuel.

The announcement comes as diesel prices have surged amid supply disruptions tied to the U.S. conflict with Iran, Ukrainian strikes on Russian refineries, and declining global inventories. The White House has been weighing several options to ease fuel costs, including a blanket diesel export ban and voluntary export limits by refiners, and has pressed the European Union to release emergency stocks. The red-dyed diesel plan appears to be the approach the administration will move forward with first, as Trump faces political pressure to lower fuel prices ahead of November midterm elections.