Tax-free diesel fuel decree from Trump

US President Donald Trump signed the executive order expanding access to tax-free diesel fuel at a rally in Nebraska.

While diesel prices in the USA reached a record level of approximately $6.50 per gallon last month, the increase in fuel costs has become an important economic issue for the Trump administration before the midterm elections to be held on November 3.

The Republican Party still has narrow majorities in the Senate and House of Representatives.

With the executive order signed by Trump, the requirement for off-road use of red dyed diesel, which is normally used in the agricultural sector and some off-road vehicles and is exempt from the federal fuel tax, was relaxed.

The decision envisages postponing the federal consumption tax arising from the use of the fuel in question on roads until the end of the year, without interest or penalty.

Trump stated that he hoped the practice would not need to continue for a long time and said, "I hope we won't need this for a long time."

With the decree, the US Treasury Secretary was instructed to work with the Secretary of Defense to investigate options for postponing the federal excise tax on the use of red dyed diesel on roads until the end of the year and then completely eliminating this tax.

The Ministry of Agriculture was asked to ensure farmers' access to red dyed diesel in regions where demand is high.

The Ministry of Transport was tasked with coordinating with state governments, industry representatives and workers' organizations.

The US-Israel war with Iran and Russia's invasion of Ukraine were effective in the rise in diesel prices in the USA.

Attacks on refineries in West Asia and Russia during the conflict led to a contraction in global diesel supplies and pushed up prices.

The increase in the price of diesel, which is used extensively in the transportation sector, has also increased the costs of transportation of goods in the USA.

G7 countries announced last week that they would release 100 million barrels of diesel to limit the impact of rising diesel prices.

The decision came after Trump considered the option of banning US diesel exports.

However, it is not yet clear how much of the amount to be released to the market will be completely new supply and how much will be part of the global agreement reached in March.

Trump's approval rating is at a record low of 32 percent, according to a Reuters/Ipsos poll completed on Monday.

While one of the topics that Americans were most concerned about in the survey was the high cost of living, the sharp rise in gasoline and diesel prices was also among the factors that increased economic dissatisfaction.

Trump's step regarding the diesel tax also stood out as one of the moves aimed at relieving the pressure on fuel prices, less than a month before the midterm elections.