Trump’s red-dyed diesel order sounds like a tax cut. Economists say it’s a 24-cent IOU that could raise prices for farmers

Donald Trump signed an executive order temporarily allowing red-dyed diesel on public roads and deferring the federal excise tax on highway fuel through December 31. The federal tax amounts to 24.4 cents per gallon, representing roughly 4% of the current average pump price of about $6.20 per gallon. Economists doubt this measure will meaningfully impact prices, as U.S. refineries are already operating at near-record capacity. They warn of a perverse effect: by diverting some red-dyed diesel to road users, this measure could raise prices for farmers and construction companies that rely on this fuel for off-road operations.

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