[UPDATE] Analysts say Trump's red-diesel order will barely lower prices and may bring a tax bill later
State laws still ban dyed fuel on highways, and the federal tax is deferred, not eliminated.
Trump's order defers the 24.4-cent federal diesel tax only through the end of 2026, about 4% of today's $6.32 national average. State laws still bar red-dyed diesel on highways (GasBuddy's Patrick De Haan: "A presidential order can't override state tax law").
PREVIOUSLY
On Oct. 1, Ohio passed a gas-tax holiday as Iran-war prices climbed. Trump then signed an order letting any driver use tax-exempt red diesel, which skips the 24.4-cent federal road-fuel tax. He also directed the Transportation Department to work with states on waiving their own diesel taxes. Gas and diesel taxes are separate, and only Ohio, Georgia and Kentucky had suspended their diesel taxes.
Diesel prices (AAA):
- Now: $6.32 a gallon national average
- Before the Iran war: $3.76 a gallon
- Record: $6.53 a gallon, set in September
![[UPDATE] Trump's red-diesel order lifts the 24.4-cent federal tax through 2026, but state laws still ban red diesel on highways chart](/charts/2026-10-07-analysts-say-trump-s-red-diesel-order-will-barely-lower-prices-and-may-bring-a-t.svg "Data: POLI")