Donald Trump is set to ease limits on the use of tax-exempt red diesel as midterm elections approach and his administration tries to contain a fuel-price crisis triggered by the US president’s Iran war. Trump is expected to announce the move during a visit to Nebraska on Monday, said people familiar with the plans. The state is in America’s agricultural heartlands, where the diesel price surge this year has brought pain for farmers.
Dyed diesel is exempt from the 24-cent-a-gallon federal diesel tax and is generally reserved for off-road use on farms and construction sites. Allowing it to be used more widely could help alleviate the shortage that has pushed up other costs across the US economy. The White House did not respond to a request for comment. Bloomberg first reported the plan.
The president has been under intense pressure to take steps to ease the price of diesel, which hit a record level of $6.53 in recent weeks. On Monday, its average price was $6.32, according to the AAA motoring group, still historically high. The fuel crisis since the US and Israel launched their war on Iran in February has squeezed American farmers and truckers in particular, undermining Trump’s popularity and denting the prospects of Republicans running for Congress in next month’s midterm elections.
Trump held crisis meetings in recent weeks to consider potential steps to alleviate the crunch, including a ban on US diesel exports. But he ruled out a ban on Friday after European allies agreed to release large volumes of the fuel from stockpiles as part of a G7 effort to combat high prices. Texas took similar measures last week, with governor Greg Abbott signing an order to allow the use of dyed diesel on public roads for a 30-day period.
Source: Financial Times Markets · Summarized by HeadlinesBriefing