President Trump signed an executive order Monday lifting restrictions on tax-exempt red-dye diesel, saying the move would reduce fuel costs for truckers and help bring down grocery prices nationwide.
Trump called the order an “unprecedented step to bring down costs” as he signed it during a raucous midterm election rally in Grand Island, Nebraska. He also predicted the measure would benefit Republicans in the pivotal November elections.
The president explained that farm vehicles, construction machinery and other off-road equipment have long used red-dye diesel, a fuel chemically identical to standard diesel but sold tax-free for off-road vehicles and large trucks.
“So tonight, I’m going to sign a historic executive order to officially waive the off-road requirement and allow anyone to purchase tax-free, red-dye diesel for any reason,” Trump announced.
At Trump’s request, White House aide Natalie Harp brought the document onto the stage, where the president signed it at the podium.
“Pete and Jim, this should absolutely ensure your election, I guarantee you that,” Trump said, referring to Sen. Pete Ricketts, R-Neb., and Republican Gov. Jim Pillen. Both are seeking another term in their respective races.
Trump said the order would save the average trucker more than $100 on every fuel refill.
He added that farmers would save “millions and millions of dollars” as a result.
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Trump also said the policy would substantially reduce the cost of transported goods, including groceries, calling it “an honor” to sign the executive action.
Red-dye diesel is chemically the same as regular diesel, but the red coloring identifies it as tax-exempt fuel.
Before the order, the fuel—typically used in tractors and other equipment—was prohibited on public roads.
The action comes after Trump secured the release of as many as 100 million barrels of diesel oil from European reserves last week in an effort to ease surging fuel prices.
According to AAA, the price of diesel in the United States reached a record $6.52 per gallon last month.
Although prices had fallen to $6.32 per gallon by Monday, they remained well above the $3.70 average recorded at the same time last year.
Because diesel powers heavy trucks, higher prices raise transportation costs and can increase the cost of goods shipped across the nation’s highways.
“We’re not going to need it long,” Trump said of the temporary easing of restrictions on red-dye diesel.
“Prices are plummeting and they’re going to really be plummeting just a little while,” he added, linking the expected decline to the end of the war in Iran, which he has said will occur “very soon” after the midterm elections.