By Jarrett Renshaw and Bo Erickson
WASHINGTON, Oct 9 (Reuters) – US President Donald Trump said on Friday there would be “big news” on diesel, as prices of the fuel used in agriculture, heating homes and trucking goods are near record highs ahead of November 3 congressional elections that will determine control of Congress.
Three industry sources said after Trump’s comments that he will issue a directive in coming days to some US department heads to find ways to control prices of diesel.
The directive, which they said could take the form of a presidential memo, will push officials to find ways to bypass local and state regulations blocking energy production and use the Cold War-era Defense Production Act (DPA) to increase output of oil and fuel.
“We have a big announcement coming up on diesel,” Trump said without elaborating at a White House event. “We have, I think, some big news on that diesel situation. We’re going to be knocking the hell out of it.”
White House spokeswoman Taylor Rogers did not comment on the specifics of a directive. “Stay tuned!” she said in an email responding to a request for comment.
Under the DPA, the president has authorities allowing loans, or loan guarantees to expand domestic manufacturing of critical materials and to require companies to prioritize government contracts for essential goods.
The White House has been weighing how to use the DPA to expand refining capacity as the war with Iran exposes a US vulnerability to supply disruptions and price spikes.
Refining executives told administration officials last month that federal money would be better directed toward making refineries more efficient or expanding existing plants rather than financing an entirely new refinery, which would be considerably more costly and take years to complete.
It is not clear how fast the directive could push down prices of diesel, which can drive inflation.
Diesel prices are up 70% since the US-Israeli war with Iran began this year, despite two high-profile recent moves by Trump to boost supplies of the fuel: pressuring allies to release emergency reserves and expanding access to tax-exempt red-dyed diesel, which is normally used for farm equipment.
The wars in Iran and Ukraine have triggered an unprecedented global fuel supply crunch, pushing average US diesel prices to $6.28 a gallon on Thursday, according to the AAA motorist organization.
Trump also said he expected gasoline prices to fall soon to levels around $1.85 to $1.95, well below Friday’s average price of about $4.37 a gallon, according to AAA.
(Reporting by Jarrett Renshaw, Bo Erickson, Susan Heavey, Doina Chiacu; writing by Timothy Gardner, Editing by Ismail Shakil)
Comments