Trump’s Red Diesel Decree Aims to Curb Rising Fuel Prices
The U.S. government has taken a step to address surging diesel costs, with President Donald Trump’s administration issuing a decree allowing widespread access to tax-free red diesel. This move comes as the average price of diesel in Texas has risen 75% compared to the previous year, reaching $6.43 per gallon as of October 2026. The policy, which permits the use of red-dyed diesel—typically reserved for off-road machinery—on public roads, is framed as a temporary measure to ease financial pressure on consumers and businesses. For Americans, the price of $6.43 per gallon is a significant burden, despite being a relative bargain for Europeans.
Red Diesel: A Tax-Efficient Solution
Rode diesel is chemically identical to standard diesel but lacks the fuel taxes applied to fuel used on public roads. Under Trump’s decree, the tax exemption will remain in effect until the end of 2026, with priority given to farmers in high-demand regions. Texas Governor Greg Abbott has also allowed businesses that were already permitted to purchase red diesel to temporarily use it on public roads. Only companies that previously had access to red diesel are now permitted to use it on public roads, according to state officials. The average diesel price in Texas is currently around $6.43 per gallon, or about 1.50 euros per liter.
Trump Admits Limited Knowledge of Red Diesel
During a rally in Nebraska, Trump acknowledged his limited familiarity with red diesel, joking, “I know by God not what it is, but whatever it is, it seems to be very good.” The move coincides with a broader energy crisis, driven by the U.S. war against Iran and a G7 agreement to release 100 million barrels of oil and diesel reserves. Despite these efforts, Trump’s approval rating dipped to 32% in recent polls.
Farmers May Sell Red Diesel to the Public
While the regular price still applies at the diesel pump, it is expected that farmers may soon offer their red diesel to anyone willing to pay. Meanwhile, the long-term impact of the decree remains unclear, with no mention of how it will interact with the G7’s market-stabilizing measures. Since the start of this month, the stock price of SpaceX has risen 13%, and Tesla’s has increased by nearly 7%.
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