President Donald Trump has ordered the IRS not to penalize the sale or use of dyed diesel as highway fuel from Oct. 5 through Dec. 31. Dyed diesel is sold for farm and other off-road use without the 24.3-cent-a-gallon federal excise tax, saving about $60 on a 250-gallon fill.
Treasury has until Oct. 10 to determine whether it has the legal authority to defer the tax on those gallons.
GasBuddy’s Patrick DeHaan counts six states that allow dyed diesel on highways: Alabama, Louisiana, Nebraska, North Carolina, Oklahoma and Texas. “Most major truck stops don’t sell dyed diesel” and “big fleets will likely sit this out,” he wrote, per FreightWaves.
Diesel averaged $6.199 a gallon in the Energy Information Administration’s weekly survey, down 18.3 cents from the previous week but $2.49 above a year ago. The survey was taken before the order was signed. The record is $6.529, set two weeks earlier.
The price held between about $3.50 and $3.90 until early March, then jumped about a dollar in one week. Union Pacific said last month that customers are moving freight from trucks to trains because of diesel prices.
Any tax Treasury defers would still be owed later. The order asks Treasury only to “explore avenues, including legislation,” to cancel it. “A clean federal diesel tax suspension would need Congress, but it would hit every gallon in every state,” DeHaan wrote.
