Diesel Prices Relief Act of 2026
HB8772, the Diesel Prices Relief Act of 2026, would create a temporary federal diesel fuel tax holiday. For diesel fuel removed, entered, or sold from the date of enactment through December 31, 2026, the bill sets the federal excise tax rate on diesel fuel to zero, except for kerosene, and also suspends the Leaking Underground Storage Tank Trust Fund financing rate for diesel subject to the holiday. The measure is framed as a short-term consumer relief bill intended to lower diesel prices during 2026.
To offset the loss of dedicated fuel-tax revenue, the bill directs the Secretary of the Treasury to transfer amounts from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund equal to the foregone receipts. It also includes coordination rules so those transfers are treated as if they were tax receipts for trust-fund purposes. In addition, the bill states as congressional policy that the tax reduction should be passed through immediately to consumers, and authorizes Treasury to use applicable enforcement authorities to ensure that fuel producers and dealers reduce prices accordingly.
The bill would temporarily amend the Internal Revenue Code provisions governing the federal diesel excise tax and the Leaking Underground Storage Tank Trust Fund financing rate, effectively reducing the tax burden on diesel fuel for the remainder of 2026. It would also require federal general-fund transfers to preserve the expected funding levels of the Highway Trust Fund and the LUST Trust Fund, limiting the direct fiscal impact on those trust funds while shifting the cost to the Treasury general fund. Affected parties would include diesel fuel producers, distributors, retailers, trucking and freight operators, and consumers who rely on diesel transportation fuel.
The bill’s text reflects a strongly pro-relief posture, emphasizing immediate consumer benefits and directing Treasury to ensure the tax cut is passed through in prices. Because there are no committee transcripts or recorded votes provided, there is no documented legislative debate or bipartisan sentiment in the available record. Based on the bill’s structure, it appears designed as a targeted, time-limited price-relief measure rather than a broader tax reform proposal.
The main policy tension inherent in the bill is between short-term diesel price relief and the loss of dedicated fuel-tax revenue that normally supports transportation and environmental trust funds. Supporters would likely favor the consumer and freight-cost relief aspects, while critics may question whether the tax cut will actually be passed through to end users, whether Treasury can effectively enforce that pass-through, and whether shifting the cost to the general fund is fiscally prudent. Another likely point of contention is the temporary suspension of the LUST financing rate, which could raise concerns about long-term funding for underground storage tank cleanup programs.