President Donald Trump announced on Thursday, October 22, 2026, that his administration is invoking the Defense Production Act to spend $150 million to boost domestic gasoline and diesel production. The president detailed the funding at a campaign rally in Sioux City, Iowa, following the issuance of a presidential memorandum earlier that day. The Energy Department stated the investment is intended to increase U.S. refining output by millions of gallons per day to address rising fuel prices.
The action follows a period of surging energy costs linked to a U.S. and Israeli joint attack on Iran in late February, which limited global shipments. Fuel shortages have been further impacted by Ukrainian attacks on Russian refineries and domestic bottlenecks. The memorandum stated that without this intervention, the U.S. could not provide sufficient energy services in a timely manner due to constrained financing, infrastructure bottlenecks, and supply chain limitations.
The Cold War-era law grants the president authority to provide financial incentives to private companies for activities deemed essential to national security, such as oil production, pipelines, and fuel storage. U.S. Energy Secretary Chris Wright said the funds would be used in partnership with private industry to bolster energy infrastructure. The $150 million will be drawn from a $1 billion fund previously appropriated by Congress for national security energy projects.
This announcement follows other administration efforts to address energy costs, including a $8 billion Harvest Fuel Relief Program announced earlier this week to help farmers with diesel expenses. Additionally, the administration recently authorized certain Russian diesel transactions and waived some sanctions to allow the purchase of 800,000 tons of fuel through April 7. Vice President JD Vance previously stated the administration would use the Defense Production Act to expand a Delek US Holdings refinery in Texas.
The scale of the initiative involves the potential increase of refining output by millions of gallons per day across U.S. refineries. Farmers are specifically cited as a group targeted for relief, particularly those in agriculture-reliant states like Iowa, Nebraska, and Kansas who are currently managing higher costs for fuel and fertilizer during the harvest season. The use of the Defense Production Act (DPA) sets a precedent for using national security authorities to fund domestic oil and gas projects normally reliant on private financing and commercial permitting.
The immediate next steps involve the Department of Energy (DOE) collaborating with private industry to allocate the $150 million in incentives. While the memorandum authorizes the spending effective immediately, the sources did not provide a specific deadline for the completion of refinery expansions or a date by which consumers might see a reduction in fuel costs. The action occurs less than two weeks before the November 3 midterm elections, where control of the U.S. House and Senate is at stake.