Trump order gives farmers temporary dyed diesel relief

Farmers will temporarily be able to use tax-exempt dyed diesel for some highway transportation as the federal government moves to provide relief from high fuel costs.

President Donald Trump signed an executive order Oct. 5 that directs the U.S. Department of the Treasury to defer the federal excise tax on dyed diesel used on highways for the remainder of 2026 without interest or penalties.

The federal highway diesel tax is 24.4 cents per gallon.

Dyed diesel is commonly used in tractors, combines and other off-road farm equipment and is not subject to highway fuel taxes. It is normally prohibited from use in vehicles traveling on public roads.

The order also directs USDA to help ensure farmers can access dyed diesel in areas with high demand and encourage states to take similar action.

The American Farm Bureau Federation (AFBF) had requested diesel relief ahead of the order, citing rising fuel costs during harvest. In an Oct. 1 letter, the organization reported on-highway diesel averaging $6.38 per gallon nationally and farm diesel nearing $6 per gallon in parts of the Corn Belt. 

“Allowing dyed diesel fuel to be used over-the-road will bring welcome relief for farmers because every cent per gallon matters when you’re running a fleet of grain trucks or hauling cattle hundreds of miles,” AFBF president Zippy Duvall said.

Several states had already taken steps to temporarily ease dyed diesel restrictions or other fuel and transportation requirements for agricultural operations.

Farmers should check federal and state requirements before using dyed diesel in highway vehicles as agencies implement the temporary changes.