President Trump on Monday expanded sales of red-dyed diesel, a tax-exempt fuel typically used for farming, to appeal to rural voters at a midterm campaign rally in Nebraska.
The president stopped mid-speech and had White House aide Natalie Harp walk on stage with an executive order for his signature that could increase diesel supply after shrinking levels have driven prices to record highs.
Diesel prices hit a record high of $6.53 per gallon last week because of declining supply due to Ukrainian attacks on Russian energy facilities and the conlfict with Iran.
People were interested in these podcasts
“Farmers will save millions and millions of dollars,” Mr. Trump said. “This order will also drive down the cost of all goods, including grocery prices, very substantially. It’s an honor to do it and we’re not going to need it long.”
Mr. Trump’s order expands sales of red-dyed diesel for vehicles that can be operated on public roadways. Because red-dyed diesel is intended for off-road use, it is exempt from taxes applied to diesel fuel sold for highway transportation.
Typically, it is sold for use in farm equipment and other off-road vehicles.
The fuel is almost chemically identical to on-road diesel. The red dye serves as a marker indicating that highway taxes have not been paid.
Prior to Mr. Trump’s order, it was illegal to use red-dyed diesel in vehicles on public roads. Using red-dyed diesel in vehicles on public streets and highways can result in significant penalties because it is considered tax evasion.
Highway diesel fuel in the United States is subject to both state and federal taxes. Federal levies on diesel fuel amount to roughly 24 cents per gallon. State diesel taxes average just over 35 cents per gallon, though the exact amounts vary by state.
Off-road diesel accounts for about 30% of U.S. diesel consumption at roughly 18.2 billion gallons annually, according to data from Wood Mackenzie.
Mr. Trump traveled to Nebraska to campaign for Sen. Pete Ricketts, a Republican who is running against an independent backed by national Democrats. He spoke in Grand Island, Nebraska, which sits in a solidly conservative part of the state.
The trip was part of Mr. Trump’s 32-day blitz of rallies to bolster GOP candidates ahead of next month’s midterm election.
Please read our comment policy before commenting.