Trump defers federal tax on dyed diesel through year-end; pump prices stay high
President Trump issued an executive order Monday telling the Treasury Department to defer federal taxes on dyed diesel and let it run on public roads through the end of the year. For jobbers and haulers, that is the development to understand this week. Red-dyed diesel is the off-road, tax-exempt fuel farmers and loggers burn in tractors and equipment. The order opens it up for highway use during harvest, when fuel bills bite hardest.
Tennessee moved fast. Governor Bill Lee said Tuesday the state would suspend enforcement of the rules that keep dyed fuel off public roads, matching the federal relief. Other states may follow.
Hold on before you move product, though. The Tennessee Trucking Association and several fuel providers are telling drivers to wait for clarity before pumping dyed diesel into a highway truck. The federal deferral and a state enforcement pause are two separate things, and the paperwork on who owes what, and when, is not settled. A hauler who guesses wrong could be on the hook when the deferral ends.
Prices haven't moved
Reuters reported Trump's supply moves have not lowered diesel at the pump. Diesel is still expensive, and the dyed-fuel relief does nothing about the underlying cost of a gallon. It shifts the tax, not the price of the molecule.
Part of the pressure is coming from overseas. Ukrainian drones hit a Lukoil refinery in Russia's Komi Republic this week, roughly 1,700 kilometers from the front, and set the Ukhta plant on fire. Moscow counted more than 500 drones across several strikes. Russia is a big product exporter, so every refinery knocked offline tightens the global balance that sets US diesel. CNN ran a piece asking why fuel is still pricey with the Strait of Hormuz open. The refinery war is a decent part of the answer.
Watch crude and distillate. Diesel could ease if Russian refining comes back and the strait stays clear, but neither is a given.
EIA trims renewable diesel
The EIA cut its 2026 renewable diesel production forecast to 230,000 barrels a day. That is a real downshift for anyone blending or buying RD on the West Coast, where LCFS economics drive demand. The agency held its fuel ethanol forecast steady for 2026 and 2027 in the October STEO, so the cut is specific to renewable diesel, not biofuels broadly.
If you are modeling blend costs into next year, the RD number is the one that changed.
Meijer tops the c-store rankings
The American Customer Satisfaction Index ranked Meijer Express first among c-store fuel brands this year, scoring an 82 on its 100-point scale and finishing ahead of better-known names like Buc-ee's and Wawa. That is up 5% from Meijer's 2025 score, the biggest gain in the study. ACSI credited the mPerks loyalty program tying fuel to in-store, plus pricing and store expansion.
The loyalty link is the lesson for operators. Foodservice now runs close to 39% of in-store gross profit, and CStore Decisions notes nearly 29% of c-store shoppers make a separate fast-food stop within half an hour. That is margin walking out the door to a drive-thru.
What to watch
Whether more states match the dyed-diesel enforcement pause, and how Treasury writes the deferral rules. Whether Russian refinery outages keep distillate tight into winter. And whether the EIA's RD cut holds in the next STEO.