Will Trump's executive order on dyed diesel lower prices? Experts explain

President Donald Trump has issued an executive order that makes a specific kind of tax-exempt diesel fuel reserved for farm and construction equipment available to a broad set of road vehicles in an effort to reduce overall diesel costs.

The type of diesel, known as dyed diesel, is exempt from a 24.4-cent per gallon federal tax, making it a lower-priced option than regular diesel. Some states expanded access to dyed diesel in a similar fashion over recent weeks, providing relief from state diesel taxes.

Dyed diesel is nearly identical to regular diesel, besides a small amount of dye used by law enforcement officers and inspectors to ensure only permitted vehicle owners avail themselves of the fuel.

The executive order on Monday came weeks ahead of the midterm elections, targeting costs associated with a fuel vital to the supply chain for everything from groceries to clothing to electronics.

The White House called on federal agencies to defer payment of federal road taxes over the remainder of 2026, and seek out ways to relieve payment of the deferred taxes.

"Farmers and truckers are essential to the American way of life. Restricted global diesel supply has led to rising prices, and these key industries have been particularly hard hit," the White House said in its executive order.

"While my Administration has already undertaken historic efforts to ensure fuel affordability for our citizens, it is clear that further temporary relief is necessary," the White House added.

In theory, a meaningful reduction in diesel prices could lower expenses for farmers and truckers, while easing the cost burden for shoppers crunched by a rise of inflation.

A host of factors will complicate the effectiveness of the order, however, some analysts told ABC News. Dyed diesel is sold at a limited set of locations designed primarily for industry operators, constraining access to the fuel.

Expansion of vehicles eligible for dyed diesel, meanwhile, could prompt a surge in demand for the fuel, exceeding available supply and putting upward pressure on prices at the pump, some analysts said.

"On paper and in the press, it sounds like it might be significant, especially ahead of the midterms. However, like many things, the paper doesn’t always match the intended reality," Patrick De Haan, a petroleum analyst at GasBuddy, said in a post on Substack.

All in all, analysts who spoke to ABC News downplayed the potential impact of Trump's decree, saying savings would be modest for farmers, who already enjoy access to dyed diesel for their energy-intensive agricultural equipment.

The move could shed nearly 25 cents per gallon from the cost of diesel for vehicle owners newly allowed to access the tax-exempt fuel, but those savings make up a small share of the price increase for diesel set off by the Iran war, analysts said.

The average price of a gallon of diesel stands at $6.31, marking an increase of $2.63, or about 70%, from a year earlier, AAA data shows.

A truck with a 150-gallon tank, for example, runs its owner about $948 for a fill-up at current diesel prices. A deduction of 24.4 cents per gallon would remove $36 from that bill.

"This is a way to try to use executive power to try to provide short-term relief," said Timothy Fitzgerald, a University of Tennessee professor of business economics who studies the petroleum industry. "But you’ve seen a very large increase in retail prices. The tax relief will help but it won’t offset the underlying difference in prices."

Meanwhile, the savings will likely be muted or nonexistent for products on store shelves, analysts added, since diesel prices make up a fraction of the costs that feed into the price of any given product.

Every dollar spent on food, for instance, usually includes three or four cents that stem from transportation costs, Omair Sharif, founder of Inflation Insights, previously told ABC News.

David Ortega, a food economist at Michigan State University, said he expects any potential price relief on grocery store shelves to be "negligible."

"If you look at how the price of fuel factors into overall food costs, we’re talking about a single-digit [percentage] share of overall food costs. This is not something that will really be driving prices down meaningfully," Ortega added.

Tom Seng, a professor of energy finance at Texas Christian University, echoed the view. "I don’t think this will be significant enough that we’ll see food prices in general come down," Seng told ABC News.

To be sure, the price savings for eligible diesel buyers could prove more significant in states that offered up an exemption from state-level taxes, compounding the benefit of the federal tax exemption.

A handful of states have granted their own waiver for dyed diesel, including important midterm states like Nebraska, North Carolina and Texas, De Haan said. Georgia and Ohio recently suspended their diesel taxes, offering their own version of relief.

The state-by-state policy differences could pose a challenge for interstate truckers, however, deterring some vehicle owners who fear local law enforcement, De Haan said.

Various impediments will limit the effect of the executive order, Ortega said. "It’s not really going to make a whole lot of difference," he added.