President Donald Trump is invoking the Defense Production Act to expand America’s petroleum refining capacity, authorizing up to $150 million in federal funding as the administration searches for ways to increase gasoline and diesel supplies amid sharply higher fuel prices.
Trump signed a presidential determination Thursday declaring domestic petroleum production, refining, pipelines, storage and other logistics infrastructure essential to national defense, opening the door for the federal government to use financial incentives to accelerate energy projects.
The Defense Production Act was enacted in 1950 during the Korean War and gives presidents broad authority to strengthen production and supply chains considered important to national security. Under Trump’s directive, the government can use purchases, purchase commitments, financial support and other mechanisms authorized under Section 303 of the law to encourage private companies to expand domestic petroleum infrastructure.
The Department of Energy separately announced that up to $150 million in Defense Production Act Title III funding will be made available for projects involving petroleum production, refining, storage and logistics at facilities across the country.
DOE said the investments are expected to increase American refining output by millions of gallons per day, with gasoline, diesel, jet fuel and other petroleum products among the fuels targeted by the initiative.
Trump announced the move during a campaign rally in Sioux City, Iowa, telling supporters that his administration was using the law to increase refining capacity and produce additional diesel and gasoline.
“Tonight, in more breaking news, my administration is using the Defense Production Act to release $150 million to increase American refining capacity to produce more diesel and more gasoline at record levels, actually,” Trump told supporters.
The administration’s action comes as fuel prices have risen substantially amid disruptions in global energy markets, including the conflict involving Iran and continued Ukrainian attacks on Russian refining infrastructure.
U.S. retail diesel recently averaged roughly $6.32 per gallon, while gasoline has averaged above $4 per gallon during recent months, increasing pressure on households and businesses that depend heavily on transportation.
Energy Secretary Chris Wright said the administration intends to use the federal money strategically alongside private industry to strengthen existing infrastructure rather than relying exclusively on construction of entirely new refineries.
The funding comes from $1 billion previously appropriated for energy-related Defense Production Act projects considered important to national security.
Trump’s presidential determination argues that financing constraints, lengthy construction schedules, permitting delays, infrastructure bottlenecks and supply-chain problems prevent private industry from expanding necessary petroleum capacity quickly enough without federal intervention.
The memorandum also ties petroleum infrastructure directly to military readiness, noting that refined fuels are necessary for the Armed Forces, industrial production and critical national infrastructure.
The latest action expands on an initiative announced earlier this month involving Delek US Holdings’ refinery in Tyler, Texas, where Vice President JD Vance said the administration would use the Defense Production Act to support increased processing capacity.
The Tyler refinery currently processes approximately 74,000 barrels per day, and Vance said the administration wants the facility to produce millions of additional gallons of commercial-grade and military-specification fuel.
The Energy Department has not yet announced which additional refineries or infrastructure projects will receive portions of the new $150 million allocation, saying the selection process remains underway.
The administration has pursued several other measures to address fuel costs, including efforts to increase diesel production at domestic and foreign refineries and plans to loan up to 315,000 barrels from the Northeast Home Heating Oil Reserve.
Trump also announced an $8 billion Harvest Fuel Relief program this week aimed at helping farmers offset elevated diesel expenses during harvest season.
Industry experts caution that expanding refining capacity is unlikely to produce immediate relief because U.S. refineries are already operating near their limits and major expansions can require months or years to complete.
Patrick De Haan of GasBuddy told CBS News he did not expect the $150 million initiative to have much immediate impact, but other industry analysts said federal assistance could potentially accelerate modernization or expansion projects over a longer period.
The United States already produces more gasoline and diesel than it consumes domestically, but American fuel prices remain exposed to global crude-oil and refined-product markets, where geopolitical disruptions have contributed to the recent surge.
