The waiver lowers the tax cost for some users but adds no new supply, so its effect on diesel futures and crack spreads should be limited. Wider use of dyed fuel could shift demand between distribution channels and add to strain on already low inventories if it encourages extra buying. The bigger drivers of distillate prices remain crude supply from the Middle East, emergency stock releases and whether Washington restricts exports, a risk that would hit global diesel markets hardest. For oil traders, the move signals political pressure over fuel costs ahead of the elections, raising the odds of further intervention.--- Trump has handed every driver a red-diesel pass, but with prices above $6 a gallon, the tax break is a drop in a very expensive tank.Summary:Trump has signed an order waiving the off-road requirement for tax-exempt red-dyed diesel, allowing anyone to buy it.Dyed diesel is chemically identical to standard diesel but exempt from the federal highway tax of about 24 cents a gallon.The US diesel average is around $6.30 a gallon, below last month's record but up from about $3.80 in late February.Analysts say the saving is modest, as the tax is about 4% of the pump price and wholesale prices are unchanged.Diesel inventories are historically low, and the G7 has agreed to release up to 100 million barrels of emergency stocks.US President Donald Trump has signed an order waiving the off-road requirement for red-dyed diesel, allowing anyone to buy the tax-exempt fuel, in a bid to ease record-high diesel costs for farmers, truckers and consumers.Red-dyed diesel is chemically the same as standard diesel but is exempt from the federal highway fuel tax of about 24 cents a gallon. Its use has been restricted to off-road purposes such as farm machinery and construction equipment, with the red dye allowing authorities to detect illegal use on public roads. Lifting that restriction effectively lets on-road users, including pickup trucks and commercial vehicles, avoid the federal tax.The move follows a surge in diesel prices driven by Middle East supply disruptions. The US national average stood at around $6.30 a gallon on Saturday, below last month's record of around $6.50 but far above the roughly $3.80 seen at the end of February before tensions with Iran escalated. Agriculture Secretary Brooke Rollins said prices were easing but that more work was needed, pointing to relief for farmers and ranchers during the autumn harvest.The savings are likely to be modest. The federal tax accounts for only about 4% of the current pump price, and analysts have noted that broader access to dyed diesel does not change the underlying wholesale price of the fuel. State fuel taxes, which average around 35 cents a gallon, are set by individual states, and it is not yet clear how they will apply.Supply remains the bigger constraint. US diesel inventories are at historically low levels for the time of year and global stocks are exceptionally tight. The Group of Seven agreed last week to release up to 100 million barrels of emergency oil and diesel stocks, while Trump has so far declined to ban diesel exports despite pressure from farm states.Further details on the scope, duration and enforcement of the waiver are expected. This article was written by Eamonn Sheridan at investinglive.com.