Trump Invokes Defense Production Act to Release $150M for Fuel Refining

Key points

• Trump issued a presidential memorandum invoking Section 303 of the Defense Production Act, a Cold War-era law, to provide up to $150 million in funding for domestic petroleum production, refining, and logistics.
• The Department of Energy stated the funds will come from a $1 billion appropriation already allocated by Congress for critical national security energy projects, aiming to increase U.S. refining output by millions of gallons per day.
• The memorandum waived certain congressional notification and authorization constraints, citing 'constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply chain limitations' as reasons for immediate federal action.
• Diesel prices have surged to an average of $6.28 per gallon, up nearly 10 cents from the previous week and $2.66 from a year earlier, creating political pressure ahead of the midterm elections.
• The administration has also pursued other measures to lower energy prices, including an executive order expanding access to tax-exempt dyed diesel, a temporary waiver of the Jones Act, and an agreement with Russia to import diesel fuel.

Background

The Defense Production Act was first used during the Korean War to expand domestic industries in critical materials. It was also used during the pandemic to fund domestic production of medicines and vaccines, and by former President Joe Biden to support clean energy manufacturing. Trump previously invoked the act in April 2026 to declare petroleum, natural gas, and other energy infrastructure essential to national defense. The current move follows a surge in fuel prices driven by the U.S.-Israel conflict with Iran, which has limited global energy shipments and exacerbated fuel shortages.

How outlets are covering it

UPI and Seeking Alpha reported that the $150 million funding will come from a $1 billion appropriation already allocated by Congress for critical national security energy projects. CNBC and Time Magazine noted that the memorandum did not specify which projects could be funded, but Vice President JD Vance indicated that the administration would use the Defense Production Act to expand capacity at a Delek U.S. Holdings-owned refinery in Texas. Time Magazine highlighted that the memorandum waived certain congressional notification and authorization constraints, a move criticized by environmentalists as 'unlawful.' UPI and Time Magazine also reported that the administration has pursued other measures to lower energy prices, including an executive order expanding access to tax-exempt dyed diesel, a temporary waiver of the Jones Act, and an agreement with Russia to import diesel fuel. Time Magazine noted that analysts warned the reduction in energy prices from these measures is likely to be limited and possibly short-lived.

Why it matters

The move aims to lower fuel prices and address energy shortages before the November 3 midterm elections, where Republicans are seeking to retain their slim House majority and control of the Senate. The high energy prices and related inflation have become a defining issue for voters, with a Reuters/Ipsos opinion poll showing just 36% of Americans approving of Trump's handling of the economy. The memorandum could support investment in fuel capacity, but its immediate effect on energy prices is uncertain, as gas prices still depend heavily on globally traded crude.

What to watch

The Department of Energy will allocate the $150 million funding to expand domestic petroleum production, storage, and logistics at refineries across the country. The administration will continue to pursue other measures to lower energy prices, including the executive order expanding access to tax-exempt dyed diesel, the temporary waiver of the Jones Act, and the agreement with Russia to import diesel fuel. The impact of these measures on energy prices will be monitored in the coming weeks, with analysts expecting limited and possibly short-lived effects.