Trump’s tax and reserve steps struggle to curb fuel prices before midterms

News Editor

2026-10-09 11:11:38

With the U.S. midterm elections set for Nov. 3, elevated gasoline and diesel prices have become a major economic problem for the Trump administration. The White House has rolled out a series of administrative measures, including allowing some dyed diesel previously limited to agricultural and construction use to be sold for road transport and delaying related federal excise tax payments. In theory, that could cut costs by as much as $0.60 per gallon, but the report said it does little to increase actual fuel supply. The administration has also pushed releases from the Strategic Petroleum Reserve and is weighing a federal gasoline tax holiday as well as limits on diesel exports. Those options come with constraints. After earlier drawdowns, the U.S. reserve is expected to fall to about 244 million barrels, leaving limited room for further releases. Export restrictions could also fill domestic storage, reduce refinery run rates, and even tighten gasoline supply. Chevron CEO Mike Wirth warned that curbing energy exports would tighten global supply and that the U.S. cannot isolate itself from international energy markets. Argus pricing manager David Ruisard estimated that about 60% of the pressure behind the jump in U.S. diesel prices is tied to shipping disruptions in the Strait of Hormuz, with the remaining 40% linked to the impact of the Russia-Ukraine war on refining supply chains.

As the Nov. 3 U.S. midterm elections approach, high gasoline and diesel prices are becoming a central economic challenge for the Trump administration, according to BlockBeats. The report said White House intervention has had limited effect because refining capacity, energy transportation and global supply constraints remain in place.

Diesel and gasoline remain elevated

U.S. diesel prices hit a record $6.52 per gallon in September, while gasoline rose from about $3 per gallon at the start of the year to above $4.

Trump recently allowed some dyed diesel, previously restricted to agricultural and construction use, to be sold for on-road use and delayed payment of the related federal excise tax. In theory, that could save as much as $0.60 per gallon, but the report said it does not materially increase fuel supply.

Policy tools face hard limits

The White House has also pushed for releases from the Strategic Petroleum Reserve and is considering suspending the federal gasoline tax and restricting diesel exports.

But the room for more reserve releases is limited. After previous drawdowns, the U.S. Strategic Petroleum Reserve is expected to fall to about 244 million barrels. Restricting diesel exports could also leave domestic storage tanks full, force refineries to cut operating rates, and even affect gasoline supply.

Chevron Chief Executive Officer Mike Wirth warned that limiting energy exports would tighten global supply and that the United States cannot detach itself from international energy markets.

Middle East and Eastern Europe remain key variables

David Ruisard, a pricing manager at Argus, estimated that roughly 60% of the pressure behind the sharp rise in U.S. diesel prices is related to shipping constraints in the Strait of Hormuz. The remaining 40% comes from the impact of the Russia-Ukraine war on refining supply chains.

After Trump signaled progress in talks with Iran and a pause in military action before the election, Brent crude briefly fell to $102.91 a barrel and WTI crude dropped to around $90.40.

The report said tax relief and reserve releases can only ease energy price pressure for a limited period. If transport through the Strait of Hormuz remains disrupted and geopolitical risks in Eastern Europe persist, the administration may struggle to push fuel prices lower before the midterms.

This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan.

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