Oct. 23 (UPI) — President Donald Trump on Thursday evening invoked a Cold War-era federal law authorizing the government to invest up to $150 million to boost domestic gasoline and diesel production amid rising prices.
“And tonight, in other breaking news, my administration is using the Defense Production Act to release $150 million to expand U.S. refining capacity to produce more diesel and more gasoline at record levels, in fact,” Trump said at a campaign rally in Sioux City, where he was vying for Republican candidates in Iowa with less than two weeks before the midterm elections.
Trump issued a presidential memorandum to invoke the Defense Production Act, a mechanism that gives the president broad powers to provide funds to businesses to increase domestic production of products deemed essential to national security.
How the funds would be allocated was not specified. The U.S. Department of Energy said the funding would come from the $1 billion already allocated by Congress for critical energy and national security projects.
According to the U.S. Department of Energy, the funding will increase domestic oil production, storage and logistics at the country’s refineries.
“By leveraging DPA authorities, DOE will help increase domestic production of gasoline, diesel, jet fuel, and other petroleum products, strengthening the U.S. fuel supply and lowering prices for American families and businesses,” the Department of Energy said in a statement.
“Together, this funding is expected to increase U.S. refining production by several million gallons per day.”
Diesel shortages and rising fuel prices are pressing concerns for the Trump administration heading into the midterm elections, as Trump seeks to help Republicans maintain their slim majority in the House and control of the Senate.
To address the global diesel shortage, the Trump administration this month lifted some sanctions on Russia and authorized some Russian diesel transactions so that Ukraine can buy about 800,000 units of Kremlin-produced fuel and Moscow can sell diesel on the global market until April 7.
“These Defense Production Act funds will be used strategically and in partnership with private industry to rapidly strengthen America’s existing energy infrastructure,” U.S. Energy Secretary Chris Wright said in a statement.
“By reinstating energy addition policies, we will continue to unlock American energy dominance and lower costs for the American people.”
At a rally in Kansas on Monday, Trump announced an $8 billion aid package for farmers, called the Harvest Fuel Relief program, to provide them with funds to offset diesel costs during the harvest season.
Earlier this month, he also eased restrictions on the use of dyed diesel and ordered Treasury to defer the federal excise tax that would normally be due when that fuel is used in on-road vehicles.
According to the U.S. Energy Information Administration, the average highway price of diesel fuel increased Monday to $6.28 per gallon, up nearly 10 cents from the previous week and $2.66 from a year earlier.
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