Trump Allows for Red-Dyed Diesel to Reduce Fuel Costs for Truckers

Diesel prices have spiraled out of control with few signs of slowing down. The national average at its recent peak was between $6.32 and $6.53. President Trump signed an order to help them fight fuel prices at the pump.

The idea behind it is to let truckers fuel up with red-dyed diesel. They would normally bar them from using it on the highway. Red-dyed diesel is known as off-road diesel, and since a law passed in 1994, they don’t allow it on the highways due to the taxes. This diesel was designed for farm tractors, construction equipment, and heating units.

Not only would you get a fine when using it, they considered it tax evasion, and it would trigger back-tax assessments. The reason they dyed it red was because it would help authorities to spot when someone wasn’t paying the appropriate taxes. President Trump has signed an order that would bypass this tax to let truckers use red-dyed diesel freely until the end of 2026.

What the Savings at the Pump Look Like

The Trump administration gave estimates that it could save truckers up to $100 on fuel for every time they refill their tank with diesel. While that looks great on the surface, groups like the National Association of Truck Stop Operators (NATSO) has warned drivers not to get too excited. The reason being that individual states continue to hold their own taxes and truckers who go into some states could face massive penalties from those states unless their bills mirror the federal level.

As of right now, 10 state governors have agreed to bypass these taxes to make it easier on American truckers.

With mid-term elections coming soon, the Republican party has been pressuring the Trump administration to take action against the ever-rising fuel prices. In Nebraska, GOP Senator Pete Ricketts is one of those who has urged Trump to do something about the fuel prices, saying that he has a strong battle against Independent party candidate Dan Osborn.

Will This Move Be Effective?

Some economists believe that this move will have a limited impact on fuel prices. They believe that there could be a huge skyrocketing cost of red-dyed diesel because of the sudden extreme demand for it, raising the price of fuel for farmers. Still, that fuel tax is set at 24.4 cents per gallon, so dropping that from the price will have an impact to an extent.

To give an idea of how bad this problem is, Americans are now spending $700 million more per day on fuel prices than what they did in the previous year, according to Rapidian Energy.

The Trump administration cited the war in Ukraine and how the lack of refining capacity has been pushing up costs—what was conveniently left out was how the War in Iran raised fuel prices across the US by more than $1.50.

Since the war started in February, fuel costs have risen 70%.

The biggest thing that could impact this measure with red-dyed diesel is that the states will also need to follow suit in removing their taxes on the diesel prices. For owner-operators that need to cross state lines, which is many of them, they might feel less willing to take the risk.

Farmers will also not receive any benefit from this because they were already buying the red-dyed diesel. The price will remain exactly the same for them.

Not Addressing the Supply Problem

One of the dangers here is that it puts a bandaid over a much bigger wound. For example, it doesn’t address the issue of a lack of diesel supply. That could mean that prices will continue to go up. Another danger is that lowering prices artificially without addressing the rampant supply problems could increase the demand on an already tight supply. This could consequently cause diesel prices to climb higher than any of the savings from the red-dyed diesel.

What are Your Thoughts on Red-Dyed Diesel?

At Trucker Social, we would love to hear your thoughts on whether you think this will lower the cost of diesel. Tell us in the comments and let us know how you’re dealing with these high fuel prices and how it’s impacting your trucking business.

If you love reading trucking news articles, we would invite you to sign up for your FREE profile at Trucker Social and get the latest news of the industry.