President Trump has signed an executive order that waives the off-road requirement to use tax-free red-dye diesel. This means truckers, farmers and timber harvesters can use red-dye diesel, which is cheaper, because it is exempt from state and federal highway excise taxes. Louisiana Agriculture Commissioner Mike Strain on the cost savings.
“And that will save, for us it’s 40¢ per gallon; for the rest of the United States, it’s 24.4¢. That’s the federal side. 24.4¢ is the federal tax,” Strain said.
The White House says the executive order immediately cuts diesel costs by authorizing highway use of tax-free dyed diesel and deferring the federal diesel excise taxk through the end of the year. Strain says the action puts money back in the pockets of farmers, ranchers, truckers and loggers.
“So, for every time a trucker fills up, the move this made saves him $100. So that is one move in the right direction,” Strain noted.
Diesel fuel prices have spiked since the Iran war started. According to AAA, the price of diesel was more than $6 a gallon last month in Louisiana. It has come down to a statewide average of $5.84 a gallon. But Strain says he’s hearing that diesel prices will remain high for many months.
“Some of the leading oil ministers in OPEC and others are saying that it could take two years to stabilize oil prices, even if the war stopped today,” Strain explained.