President Donald Trump is set to expand access to tax-exempt dyed diesel in an effort to lower fuel costs ahead of the midterm elections.
The president is set to announce an executive order that would allow for greater access to red-dyed diesel, Reuters reported on Monday. The fuel is typically reserved for off-road uses and is exempt from the highway tax of 24.4 cents per gallon.
The order would also direct the Transportation Department to coordinate with states to waive taxes on road diesel. Many states have already taken action, with Ohio, Georgia, and Kentucky temporarily suspending their state tax on diesel fuel.
Alabama, Arkansas, Louisiana, Missouri, Montana, Nebraska, North Carolina, North Dakota, Oklahoma, and Texas have allowed for greater access to dyed diesel.
The Trump administration has been weighing its options to lower record-high diesel prices before the November elections. As of Monday afternoon, the national average price for diesel is $6.32 per gallon. Diesel prices have been elevated due to conflict abroad in Ukraine and Iran, which has strained the global fuel supply chain.
High diesel prices affect key economic sectors that rely on the fuel to power trains, equipment, and other heavy machinery, especially in the agriculture sector.
Trump has previously called for a ban on diesel exports to lower prices, but has since retreated from that possibility. Some members of his administration and fuel experts have argued that an export ban would backfire and push fuel prices even higher in the United States.
STATES TAKE MATTERS INTO THEIR OWN HANDS TO CURB RECORD-HIGH DIESEL PRICES
“We were never going to do it,” Trump told reporters on Friday. “I don’t think we were.”
The president withdrew consideration for a ban after the Group of Seven agreed last week to release up to 100 million barrels of oil and diesel from its emergency stocks.