News

Fuel analyst questions impact of dyed diesel order

A fuel economist says he has some concerns about President Trump’s executive order on red dyed diesel.

Patrick De Haan with GasBuddy says he’s doubtful the action will provide significant relief to farmers.

“First of all, the taxes – as I understand it – are deferred,” he said. “Meaning that at some point in the near future, the IRS or the federal government still could send you a tax bill. These taxes on dyed diesel still could come back at some point down the road.”

He tells Brownfield there’s now a relaxed enforcement at the federal level, but, “Some states still could enforce dyed diesel requirements to stay off-road, and if you are caught on-road in a state that has not waived enforcement, you still could pay hefty fines, fees, and get tickets and citations.”

De Haan says there could also be some availability issues.

“You may find it in rural communities across the United States that are big farming communities or much more rural in nature, but dyed diesel is not generally a product that you are going to pull into a truck stop and find readily available.”

And he says there are only a handful of states that have waived the enforcement.

“So what sounds like big tax relief may end up being just for a few, especially for the few that aren’t crossing state lines to risk the shifts in enforcement,” De Haan said.

As of Wednesday, 11 states had waived penalties for using dyed diesel including Alabama, Illinois, Iowa, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Dakota, Tennessee, and Texas.

Patrick De Haan: