By Julie Tomascik
Editor

Farmers, ranchers and truckers will have temporary access to tax-exempt dyed diesel for highway use under an executive order aimed at easing record-high fuel costs.

President Donald Trump signed the executive order Oct. 5.

It directs the U.S. Department of the Treasury to defer federal excise taxes on dyed diesel used on highways through the end of the year. The order also provides relief from federal penalties for on-road use of dyed diesel during that period.

Texas Farm Bureau (TFB) and the American Farm Bureau Federation (AFBF) support the action.

“We thank President Trump for recognizing that what happens at the fuel pump directly affects what happens on the farm and therefore at dinner tables across America,” AFBF President Zippy Duvall said. “Allowing dyed diesel fuel to be used over-the-road will bring welcome relief for farmers because every cent per gallon matters when you’re running a fleet of grain trucks or hauling cattle hundreds of miles.”

The order follows a request from AFBF for the administration to take immediate steps to lower diesel costs as farmers face high fuel expenses during harvest.

“The federal highway diesel tax is currently more than 24-cents per gallon, so it’s a big deal to farmers to be able to use tax exempt diesel more broadly to get their harvest to market,” Duvall said. “We appreciate that the president listened to farmers and responded.”

The national average on-highway diesel price reached $6.38 per gallon in late September, according to AFBF. Farm diesel in parts of the country climbed to nearly $6 per gallon this year.

Dyed diesel is typically used in off-road equipment, including tractors and combines, and is exempt from highway fuel taxes. It is the same as regular diesel but dyed red to distinguish it for off-road use.

Under the executive order, the Treasury secretary, in consultation with the secretary of defense, is directed to defer payment of federal excise taxes for on-road use of dyed diesel for the remainder of the year without interest or penalties. The order also directs the Treasury secretary to “explore pathways to eliminate the obligation to pay the deferred taxes.”

Additional provisions call on the U.S. Department of Agriculture (USDA) to work with agricultural cooperatives, rural fuel distributors, farm supply organizations and other agricultural groups to ensure adequate supplies of dyed diesel in high-demand areas.

USDA also is directed to encourage states to take similar action.

Texas is one of several states that have already temporarily eased restrictions on dyed diesel use.

Gov. Greg Abbott issued a statewide disaster declaration Sept. 28 temporarily waiving state restrictions on the use of dyed diesel on Texas roads. The declaration also temporarily increased allowable weights for fuel, agricultural and timber loads.

The executive order provides federal relief through Dec. 31.