White House weighs tax-exempt diesel expansion to cut fuel prices

The White House is considering regulatory relief to allow broader sales of tax-exempt red-dyed diesel as a way to lower soaring fuel prices, potentially letting some buyers avoid the federal fuel tax, according to two people familiar with the discussions. The proposal has emerged as a leading alternative to a diesel export ban, which President Donald Trump has backed but faces widespread opposition from the oil industry. The administration is under pressure to ease fuel costs ahead of November's midterm elections, and has also sought voluntary commitments from major refiners to limit exports. Critics say the plan would not address supply imbalances driving up on-road diesel prices, as farmers already use untaxed dyed diesel. Several states, including Alabama, Louisiana, and Nebraska, have taken temporary steps to relax restrictions, while the national average diesel price has climbed above $6 per gallon.