Trump weighs diesel export ban as diesel prices spike and states eye gas-tax pauses
President Trump said Tuesday he has told his team to consider banning diesel exports, and Treasury Secretary Scott Bessent said officials are studying whether to make it full or partial. If you move fuel for a living, that is the one to watch this week.
The pitch is simple. Keep diesel at home, push down the price at the rack. The mechanics may not cooperate. US Gulf Coast refiners run hard in part because they can sell diesel abroad. Wall off the exports and some of those barrels have nowhere to go, which could push refiners to cut runs rather than flood a saturated domestic market. Cut runs and you tighten supply of everything that comes off the same barrel, gasoline included. The Motley Fool laid out that backfire case this week, and it is the argument the trade groups have been making. Some Republicans are pushing for the ban regardless. FreightWaves flagged the same worry for truckers: a policy meant to cut the diesel bill could raise it.
Diesel spike and gas-tax pauses
More states are weighing a pause on fuel taxes ahead of Election Day as diesel climbs, the Washington Post reported. In Connecticut diesel is at a record and heating oil is up 50% in three months, per the Norwich Bulletin, which puts real pressure on Northeast operators heading into heating season. Massachusetts is looking at its gas tax too, and the Berkshire Eagle's editorial board called meddling with it a short-sighted nonsolution. A tax holiday shaves a few cents at the pump and blows a hole in road budgets, and it does nothing about the supply picture driving the number.
The Russian refinery strikes
Ukraine struck the Ilsky refinery in Russia's Krasnodar region overnight on September 26, its General Staff said, and a fire broke out. Ilsky processes about 6.6 million tonnes of crude a year. A day earlier, a drone strike took Russia's Perm refinery offline, Reuters reported. Perm runs about 252,000 barrels a day and made roughly 5.3 million tonnes of diesel in 2024. This is foreign news that reaches your rack. Every Russian refinery knocked out tightens global diesel supply, and tight global supply is part of what has US diesel where it is right now. It feeds straight into the export-ban math above.
Demand is wobbling
US consumer confidence fell to its second-lowest reading on record amid the oil-price and inflation squeeze, per Conference Board data reported this week. For c-store operators, that is the in-store basket, not just the fuel island. When people are watching the pump number, they buy less of the high-margin stuff on the way out.
What to watch
Bessent's team still has to decide between a full and a partial export ban, and how fast it moves. The Northeast heating-oil pull could make the diesel squeeze worse before winter. No state has actually paused its fuel tax yet, and November is the deadline that matters. E15 is headed to California pumps as a cheaper option, which could pull a little demand off straight gasoline over time.