Trump falsely claims his executive order makes red diesel tax-free

The US Energy Information Administration (EIA) put standard federal diesel taxes and fees at 24.4 cents per US gallon in January 2026. If that full amount were removed and passed on to buyers, the saving would equal about 3.9% of September’s $6.29 US average pump price. That is a hypothetical full tax cut, not one enacted by this order. [9] [10]

Kansas law still applies

Trump’s attack on Kelly leaves out Kansas’s own law, which generally bans operating a motor vehicle with dyed fuel in its tank. An exception covers vehicles refuelled outside Kansas in a jurisdiction that allows that type of fuel. [6]

The IRS says many states have offered similar relief, but its own measures do not affect state fuel taxes or penalties. Kansas revenue guidance lists a 26-cent tax per US gallon on road diesel. Non-road dyed fuel can instead be subject to sales tax where no exemption applies. [4] [7]

In a statement reported by KSN earlier this month, Kelly said the order “cannot be legally implemented as drafted” in Kansas. She called it an “election year gimmick” and warned of price and enforcement problems if it were implemented. [11]

Her opposition is clear. But presenting Kansas’s position simply as a governor withholding a federal tax exemption is misleading: the federal exemption Trump describes has not been created, and Kansas has separate legal restrictions.

Farm aid, with payment rates still to come

USDA says its $8bn Harvest Fuel Relief Program will provide one-off payments administered by the Farm Service Agency under authority of the Commodity Credit Corporation Charter Act. The announced formula will use planted acreage and national production-cost, yield and price data to offset part of modelled losses for the 2026 crop year. [5]

Payment rates for an initial group of commodities are due in November, with methods for other eligible products to be announced later. The application period has yet to be announced. The package is therefore a separate aid programme, not a repeal of diesel taxes or a specified reimbursement for every farmer’s fuel bill. [5]

Trump credited Kansas Republican Senator Roger Marshall with fighting for the aid. Marshall’s office had publicly called for temporary, targeted support on 14 September, before the executive order. His earlier advocacy is documented, although his precise influence on the final package is unclear. [2] [8]

The president also promised more farm funding if Republicans win in November and predicted fuel prices would fall sharply after a swift end to the Iran war. [2]

The EIA’s 6 October outlook anticipated a gradual diesel-price decline, with prices remaining above $4 per US gallon through 2027. It pointed to costlier crude oil, wider refining margins and low inventories amid Middle Eastern supply disruptions. That forecast used inputs finalised on 1 October, before the diesel order and the new aid announcement. [9]

For sellers and road users, the tax distinction has a practical consequence. The IRS says retailers are generally liable for the federal tax on dyed diesel sold for road use; where the fuel is not bought at retail, the vehicle operator is generally liable. The penalty waiver does not cancel that underlying obligation. [4]