The Trump administration is spending up to $150 million to boost U.S. oil refining and fuel shipping after diesel prices climbed to $6.32 a gallon nationally.
The Energy Department said Thursday it will use Defense Production Act authority to put as much as $150 million toward higher oil output, more storage, and better fuel shipping at American refineries. President Donald Trump signed a matching determination the same day that declared U.S. oil production, refining, and fuel logistics vital to national defense. The Daily Caller first detailed the dual moves.
National diesel averaged $6.32 a gallon Friday, up from $3.63 a year earlier, according to AAA figures cited in the reporting. That jump hits truckers, farmers, and families who already feel every cent at the pump. The White House determination, directed to the secretary of war, stated that domestic industry “cannot reasonably be expected to provide these capabilities... in a timely manner due to constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply chain limitations.”
Energy Secretary Chris Wright framed the cash as a practical partnership, not a government takeover.
"These Defense Production Act funds will be used strategically and in partnership with private industry to rapidly bolster America’s existing energy infrastructure,"
Wright said in the department release. The department has not named which refineries will get the money and said it will announce selections soon. Congress earlier set aside $1 billion through the Working Families Tax Cuts law for energy projects judged vital to national security; the $150 million comes from that pot.
Trump had already signed a similar determination in April covering the same capacity and addressed to the energy secretary. The latest order expands the signal. Vice President JD Vance has said the administration plans to use the law to expand a Delek US Holdings refinery in Texas, a point first noted by Reuters and carried in the coverage.
At a campaign rally in Sioux City, Trump put the move in plain terms. Breitbart reported his remarks: the 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.” The Energy Department added that the authority will help raise domestic output of gasoline, diesel, jet fuel, and other petroleum products to strengthen supply and lower prices for families and businesses.
The Defense Production Act is a Cold War-era statute that lets the president prioritize industrial capacity when national defense requires it. Trump is applying it here to keep fuel flowing inside the United States rather than waiting on foreign bottlenecks.
That focus matches other energy steps the administration has taken, including the backing of a $1.9 billion loan to restart an Iowa nuclear plant.
American Fuel & Petrochemical Manufacturers, the industry trade group, welcomed the recognition. A spokesperson told the Daily Caller News Foundation that the whole world has seen refineries are national security and economic assets, and U.S. plants are the strongest example.
"Our country’s 128 operating refineries produce more fuel in the United States than we consume,"
the spokesperson said. “They are running all-out to keep Americans supplied and the global economy moving despite major disruptions and actual fuel shortages in other parts of the world.” The group is not privy to unannounced capacity projects, the spokesperson added, and said the priority should be keeping U.S. refineries strong, creating a stable investment climate, moving fuel, and stripping unnecessary costs and regulatory barriers so consumers get relief.
Neil Atkinson, a senior fellow at the National Center for Energy Analytics, pointed to the tight numbers. U.S. refineries were running at about 94 percent of capacity in the latest weekly Energy Information Administration figures. “There is almost no idle capacity in the U.S.,” Atkinson said. He also noted the scale problem: “$150 million is not much money to spend in an industry that requires many hundreds of millions and into the billions to make major changes.”
Matt McManus, another senior fellow at the same center, saw the signal value. Mark Mills, the center’s founder, endorsed the point.
"The Defense Production Act is helpful in signaling to the energy industry and financial markets that energy supply is a strategic national priority, thereby supporting market forces in bringing additional capital to bear,"
McManus said. He added that constraints on Persian Gulf refineries mean the market needs more supply; the funding is not an instant fix but will help over the medium term.
Those market pressures sit alongside earlier fuel-supply moves such as the diesel supply arrangement reached with Russia when U.S. prices neared $6.50.
Valero finished idling every processing unit at its Benicia, California, refinery in April. Phillips 66 declined to comment on the new federal money. Delek and LyondellBasell did not immediately respond. The California Energy Commission and Gov. Gavin Newsom’s office also offered no on-record reply.
John Calce, chairman and founder of America First Refining, said his company is pushing ahead with what it calls the first new major U.S. refinery in more than 50 years, targeted to operate in 2029. He declined to discuss financing plans or whether the firm would seek the Defense Production Act dollars.
An American Petroleum Institute spokesperson said the group is still reviewing the administration’s action to understand its scope. “America’s energy security depends on a strong domestic energy system and policies that allow us to produce, refine and move energy where it’s needed,” the spokesperson said.
U.S. crude production already averaged about 13.6 million barrels a day in 2025, more than any other country, Reuters figures showed. The gap is not crude in the ground; it is the ability to turn that crude into gasoline, diesel, and jet fuel fast enough and move it where trucks and families need it. The same practical focus has shown up in defense industrial orders, from the Pentagon’s planned tenfold missile-buying surge to new testing ranges.
Permitting delays, infrastructure bottlenecks, and tight capital are exactly the frictions the presidential determination named. When California idles a full refinery and national diesel doubles in a year, the cost lands on working people first. Federal cash alone will not build a new plant overnight, yet the order puts national-security weight behind keeping existing units running and expanding what can still expand.
Earlier diesel export pressure eased only after Europe agreed to release oil reserves, a sequence that underscored how quickly fuel politics can shift. The new refining money keeps the focus at home.
American drivers and truckers do not need lectures about green transitions while diesel sits above $6. They need more gallons leaving U.S. gates. Trump just put federal muscle and $150 million behind that simple requirement.