Trump’s Diesel Relief Push Leaves Costs Near Record Highs

U.S. diesel rose nearly 10 cents a gallon in the latest week, hitting an average of $6.28. That came as President Donald Trump rolled out measures to lower fuel costs before the November 3 midterm elections. His administration has offered billions of dollars to farmers, relaxed rules for truckers, eased sanctions on Russian fuel and pressed European allies to release emergency stocks. Still, prices climbed.

Farmers, truckers and workers face higher fuel bills, while officials at the top make the decisions meant to ease them. Nearly 80% of Americans blame Trump for higher costs, according to an October Reuters/Ipsos poll. Republicans are defending narrow congressional majorities as voters focus on costs.

Relief from the Top, Costs Below

National Farmers Union President Rob Larew described the limits of one-time government payments before the administration defended its program. “This is the second round of emergency aid this year to address losses that were largely foreseeable,” he said. “Trade disruptions and rising fuel costs tied to conflict abroad have put family farmers in a difficult position, and one-time payments can't provide the stability they need to plan for the future.”

Farm payments already appeared likely to top $47 billion this year. That total includes commodity payments and $12 billion in tariff relief that the U.S. Department of Agriculture distributed earlier in the year. The proposed $8 billion farm relief program would bring the total to a record $55.4 billion, surpassing the previous high of $45 billion in 2020, when farmers received pandemic assistance. The payments may help farmers handle higher costs and lost sales, but they don't directly address the market disruptions driving fuel and fertilizer prices.

The USDA couldn't immediately say how officials would allocate the latest aid, when farmers would receive it or whether Congress would need to approve it. Farm groups also say the administration’s trade and foreign policies contributed to some of the damage, leaving taxpayers to help producers cover costs those policies may have helped create.

At campaign rallies across the Farm Belt, Trump promoted his response. Higher fuel and fertilizer costs, trade disruptions and weak farm economics have fueled discontent among some of his core supporters. In Nebraska, he signed an executive order allowing red-dyed diesel in highway vehicles. Then, at a rally in Kansas on Monday, he announced $8 billion in new farm aid.

A Tax Waiver With Murky Rules

This month’s executive order lets truckers use red-dyed diesel on highways, though the fuel is typically meant for off-road uses such as farm equipment. The order temporarily waives certain federal tax reporting and record-keeping requirements. The Internal Revenue Service hasn't eliminated the federal diesel tax; instead, it temporarily waived related reporting requirements and penalties through year-end. That leaves truck stops and fuel sellers uncertain about the rules.

David Fialkov, the top lobbyist at NATSO, a trade group representing the largest U.S. truck stop operators, said members appreciate the effort but see the guidance as “murky” and too risky. “I really don't see any of these dyed diesel announcements making a meaningful dent in diesel prices,” Fialkov said. That's an administrative workaround, not a change to the fuel market driving prices.

Energy pressures go well beyond the rules. Analysts say the Iran conflict has been the much bigger driver of the diesel price spike, disrupting global oil flows and refined-fuel supplies. Ukrainian attacks on Russian refineries have tightened supplies but played a more limited role in prices. Ahead of the elections, Trump has tried to shift blame toward Ukraine and President Volodymyr Zelenskiy rather than the Iran war.

Easing sanctions on Russian diesel risks helping Moscow finance its war in Ukraine. Pressure on European allies to release emergency stocks, backed by a threat to restrict U.S. diesel exports, has also created diplomatic friction. Farm aid carries a financial cost, too, adding strain to federal spending. Edward Fishman, director of the Maurice R. Greenberg Center at the Council on Foreign Relations, called the blame placed on Ukraine “a blame-shifting kind of scapegoating operation, more than a genuine attempt to moderate prices in the lead-up to the election.”

The White House blamed high diesel prices on “pre-existing issues,” including years of refinery closures and damage from Russia's war in Ukraine. White House spokeswoman Taylor Rogers defended the administration’s actions: “The President wants diesel prices to fall, which is why he has taken historic actions to save American farmers, truckers, and workers every hard-earned penny.”