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Diesel executive orders bring confusion amid potential relief

The associate director of transportation and infrastructure with the Illinois Farm Bureau says executive orders at the state and federal level to allow highway use of dyed diesel could help farmers save money this fall, but questions remain.

Rodney Knittel tells Brownfield the move would save farmers at least 80-cents a gallon in fuel taxes, however, “Neither the governor nor the president has the ability to forgive the tax, so there’s a potential risk that you may be liable for the motor fuel tax both at the state and federal level unless there is legislative action.”

Central Illinois farmer Derek Martin, who farms in Logan County, says the move would provide relief in a tight margin environment.

“We got a load of dyed fuel the other day for the equipment, and I think it was $5.40 or $5.50, while highway diesel is anywhere from $6.60 to $6.99,” he says.

Despite the potential savings, Knittel says there are also concerns about what happens when the orders expire at the end of the year.

“It could take seven to eight times of running highway diesel in the tanks to completely clean out the residuals of the red dyed diesel.”  He says, “And so is there going to be a grace period, not a grace period? Is it January 1 that we need to be 100% clean.”

He says the issue is also creating questions for producers transporting products or livestock across state lines.

“Certainly check the reciprocity and what the state that you’re traveling to, what they’re going to accept,” he says.

Knittel says both state and federal orders call for additional guidance from several departments, so Illinois Farm Bureau and other commodity groups are encouraging farmers to continue using taxed, on-road diesel in registered highway vehicles to avoid potential penalties that remain unknown.

AUDIO: Rodney Knittel – Illinois Farm Bureau