Diesel Hits $6.53 a Gallon as Trump Administration Scraps Export Ban Idea, Alabama Suspends Fuel Tax Rule

Since diesel first crossed $6 a gallon nationally on September 11, according to AAA data reported by the Epoch Times, the price has kept rising. The national average hit $6.53 a gallon for the week of September 21, up from $3.75 during the same week a year earlier, according to federal energy data cited by Fox News. That's a 74% jump in twelve months, and it landed during a midterm election year.

The Export Ban That Wasn't

President Trump raised the idea of restricting diesel exports at the United Nations General Assembly this week, telling reporters, "I've said let's not send out the diesel. We make a lot of diesel." Treasury Secretary Scott Bessent said the administration was evaluating whether a full or partial ban was "feasible in terms of the overall refining capacity," according to Fox News.

The logic seemed straightforward. If less American diesel leaves the country, in theory more stays home and prices fall. That's the case Trump and some lawmakers on both sides have made.

But by Wednesday, a White House official told Fox News Digital the administration was no longer considering the ban, saying only that Trump "is evaluating all the options on the table."

Economists gave the administration plenty of reasons to back off. Joe Brusuelas, chief economist at RSM US, warned that an export restriction could offer short-term relief before driving up transportation costs and grocery prices. In a Daily Signal opinion piece, EJ Antoni and Sarah Wagoner argued the U.S. produces 5.3 million barrels of distillates a day but only consumes about 3.5 million domestically, meaning the real problem is refinery closures and foreign conflict, not a lack of domestic supply. They also noted the U.S. imports crude that foreign producers expect refined products sent back to them in return. Cut that off, they argued, and countries lose the incentive to sell America crude at all. Geography compounds the problem: most U.S. refining capacity sits on the Gulf Coast, far from the Northeast and West Coast markets where prices are highest, which is why the administration has already granted Jones Act waivers this year to ease coastal fuel shipping.

States Move on Their Own

While Washington debated and dropped the export ban, Alabama Governor Kay Ivey acted directly. She ordered the Alabama Law Enforcement Agency to stop enforcing rules on dyed diesel fuel for 120 days, effective immediately. Dyed diesel is tax-exempt fuel meant for off-road farm and timber equipment. The order, timed to Alabama's harvest season running through mid-November, gives farmers and loggers a break as diesel prices in the state have risen nearly a dollar in a month and almost three dollars over the past year, according to Alabama Public Radio.

Europe's Bigger Bill

The pain is worse across the Atlantic. The Organization for Economic Cooperation and Development reported Wednesday, September 23, that seven of the ten countries most actively intervening to offset fuel costs are in the European Union. Lithuania cut train ticket prices in half. Greece raised gambling taxes to fund relief. Italy delayed shutting down coal plants and cut red tape for oil and gas projects. Poland has proposed taxing fuel producers' record profits.

EU citizens are spending an extra 203 million euros, about $231 million, a day just on diesel, according to the advocacy group Transport & Environment. Analyst Antony Froggatt called it "a cruel irony that the U.S. is the least vulnerable to a crisis of its own making, while Europe's economy again takes the hit," according to Fortune. France announced a 450 million euro relief package on Tuesday, September 22. European Commission President Ursula von der Leyen told the bloc in her State of the Union address last week that Europe needs to "double down on our affordable, homegrown, clean energy" to reduce reliance on imports, which currently supply 57% of the EU's energy needs.

The Political Fight at Home

Trump has told voters the pain is temporary and worth it. "It's a very inexpensive price to pay for what we've done," he said at a North Carolina rally, referring to the war with Iran, according to the Daily Wire. He's predicted oil prices will fall "like rocket ships in reverse" after the midterms, and Bessent has floated crude falling to $40 a barrel once the war ends.

Democrats aren't buying it. California Governor Gavin Newsom cited a Joint Economic Committee estimate claiming the average family has spent an additional $4,200 since Trump took office. Senator Mark Kelly of Arizona said Trump "still can't explain what this war is for" and has delivered only "higher gas and grocery prices." Neither claim has been independently verified against a full accounting of what's driving the increase, which sources across the political spectrum tie to the Iran war, Ukrainian strikes on Russian refineries, and damage to a Saudi pipeline.

A national poll conducted in June found roughly two-thirds of registered voters say fuel costs will influence how they vote in November. Whether Trump's post-midterm price drop actually materializes, and whether the export ban idea resurfaces if diesel keeps climbing, remains to be seen.