President Trump signed an order on October 5 that lets the Treasury Department postpone the federal excise tax on diesel fuel for taxes incurred through December 31. Drivers and truckers have not seen much at the pump. The government’s latest weekly survey put the national average for on-highway diesel at about $6.18 a gallon, or $6.179 to be exact, which is $2.51 above a year ago.
The order is narrower than a tax cut. It lets payment be pushed back and does not cancel the bill, and the Internal Revenue Service has not yet said how the postponement will work. Meanwhile the cost of moving freight, running a farm and heating a home with oil is arriving at full price.
What Executive Order 14435 lets Treasury do
The order, titled “Emergency Tax Relief on Diesel Fuel,” was signed October 5 and appeared in the Federal Register on October 9 as Executive Order 14435. It says the Treasury secretary may defer payment of diesel excise taxes incurred from October 5 through December 31, 2026, for taxpayers affected by a qualifying event under section 7508A of the tax code.
Deferred amounts are to carry no penalties or interest “to the extent authorized by law,” the text says. The order also tells Treasury to explore ways, including legislation, to eliminate the obligation to pay the deferred amounts, and it states that it creates no enforceable rights for any taxpayer.
The White House posting of the order adds that the Federal Motor Carrier Safety Administration must keep enforcing existing compliance rules for trucks. The order’s stated goal is relief for farmers, truckers and workers.
Anyone who buys diesel for a truck, a tractor or a delivery route is the first to feel any change, and so is anyone who heats with oil or depends on trucked-in goods. They face the same open question: whether to budget as if $6.18 is the new normal. The tax is postponed rather than erased, and the terms are not yet published.
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What the IRS has announced so far
On October 14 the IRS issued news release IR-2026-122 in response to the order. The agency said it will not impose penalties when dyed diesel fuel is sold for or used on highways nationwide. Dyed diesel is the tinted fuel normally meant for farm and off-road equipment, and putting it in a road vehicle ordinarily draws penalties.
That relief is retroactive to October 1 and runs through December 31. The IRS says it will not carry out federal inspections of on-road dyed fuel use during that time, and sellers have no duty to investigate how the fuel is used. It covers missed semimonthly deposit penalties and inadequate-records penalties too.
The deferral itself is still pending. The IRS says it expects to issue further guidance on postponing payment of certain taxes under section 7508A and will explore ways to eliminate the obligation to pay deferred amounts. No deferral terms have been given. The relief applies only to the federal tax, not to state fuel taxes.
Diesel at $6.179 a gallon after the order
The Energy Information Administration’s weekly retail survey for the week of October 12 put on-highway diesel at $6.179 a gallon. That is down 2.0 cents from the week before and $2.514 above the same week last year. Regular gasoline averaged $4.331, up $1.270 from a year ago.
Diesel has been easing since late September, when the same survey showed $6.529 for the week of September 21 and $6.382 for the week of September 28. The week of October 5 came in at $6.199. California remains the most expensive market, with diesel at $8.091 in the October 12 survey.
The agency says its prices include all taxes. The next weekly survey is due October 20, the first full look at prices after the IRS announcement.
Crude oil and the winter outlook
Wholesale prices are still high. EIA’s spot price table shows New York Harbor ultra-low-sulfur diesel at $5.066 a gallon on October 14. Brent crude, the global benchmark, closed at $126.55 a barrel that day after peaking at $130.18 on October 8, and West Texas Intermediate stood at $101.91.
EIA’s October Short-Term Energy Outlook, released October 6, expects retail diesel to average $5.19 a gallon for 2026 and $4.49 in 2027. It forecasts Brent at $96 for the year, $105 in the fourth quarter and $84 in 2027. The 2026 diesel average includes months before the recent run-up, so it is lower than today’s price.
Heating oil homes carry the biggest winter jump
The same outlook says homes that heat primarily with fuel oil will spend 21% more this winter than last. Those homes are about 3% of U.S. households and sit mostly in the Northeast. New York Harbor heating oil traded at $4.834 a gallon on October 14, according to the EIA spot table.
Homes that heat with natural gas or propane, around half of U.S. households, should spend less than last winter, EIA says. Electric-heat homes should spend slightly more. These are fuel bills only. The outlook does not estimate what trucked groceries, parcels or farm goods will cost.
No agency has said how much of a postponed diesel tax would reach store shelves or delivery fees. For households watching the question of how much more fuel and delivered goods will cost this winter, the data points to heating oil first, and to diesel prices that remain $2.51 above last year whatever Treasury decides.
Will $6.18 diesel follow into your winter bills?
Anyone on a fixed income who heats with oil or buys goods that arrive by truck is facing a winter in which diesel sits $2.51 above last year and EIA expects oil-heated homes to spend 21% more. The diesel tax postponement does not lower that bill, and the IRS has yet to publish its terms.
The fuel price itself is out of any household’s hands. The related job is finding programs that help carry the cost. The Benefits Checklist scans 11 benefit programs retirees often miss, with the 2026 income limits, and Part 4 covers SNAP, heating help and free weatherization.
Check the 11 programs and 2026 income limits in the Benefits Checklist →
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This article was produced with the assistance of AI and reviewed by the editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
