President Trump signed an executive order letting truckers and farmers run tax-exempt, red-dyed diesel on public highways and deferred the federal excise tax on highway diesel through the end of 2026. The move follows a record national average diesel price above $6 a gallon in September, and Kalshi traders are now betting the price retreats to $6.20 or below by Election Day.
President Donald Trump signed an executive order Monday evening temporarily allowing truckers and farmers to use red-dyed diesel on public roads, a fuel normally reserved for farm and construction equipment. The order also defers related federal taxes on the fuel through the end of this year.
Why the order matters
Red-dyed diesel is exempt from the 24.4 cent-per-gallon tax applied to highway diesel, and using it on public roads is normally illegal. But with costs at record highs, the White House said truckers could save more than $100 per fill-up. The order also directs the Treasury Secretary to explore pathways to eliminate the deferred tax obligation altogether.
The U.S. national average price of diesel topped $6 a gallon in September for the first time ever, and Americans are spending about $700 million more per day on gas and diesel than a year ago, according to Bob McNally, president of Rapidan Energy. Separately, AAA data cited by Kalshi shows diesel peaked at approximately $6.53 a gallon in September.
Trump points to Ukraine, not Hormuz
Speaking at a rally in Nebraska, according to CNBC: Trump said the policy would cut costs "substantially". On Truth Social, he argued fuel costs were not being driven up by disruption in the Strait of Hormuz, instead blaming Ukraine's attacks on Russian refineries. The White House has cited tight global supply tied to the war in Ukraine and a lack of refining capacity as the drivers of higher diesel prices and household costs.
The Group of Seven nations also agreed to release 100 million barrels of diesel and crude oil reserves after pressure from Trump, who had floated a ban on U.S. exports of the fuel.
Traders bet on relief by Election Day
On Kalshi, traders are pricing the national average diesel price at $6.20 a gallon or lower by November 3, 2026 — Election Day — with activity concentrated on shorter-term contracts leading up to that date. The same markets assign an 11-17% probability to a complete export ban on diesel products by late October or Election Day.
A tax deferral lowers what buyers pay at the pump, but it does not resolve the underlying supply pressure from the conflicts in Ukraine and Iran.
Sources: CNBC, CNBC, Crypto Briefing
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