Trump's Diesel Tax Order May Not Lower Pump Prices, Analyst Says

President Donald Trump's recent executive order allowing the use of red-dyed diesel on public roads without the federal tax of approximately 24 cents per gallon is unlikely to significantly reduce diesel prices for most users, according to Patrick De Haan, an analyst at GasBuddy. De Haan highlighted that the order does not address diesel supply issues, which are primarily influenced by factors such as Middle East oil flows, low inventories, and emergency stock releases.

De Haan pointed out that dyed diesel, which is essentially the same as standard diesel but marked to indicate that the federal tax has not been paid, is still subject to state laws. In most states, using dyed diesel on public roads remains illegal, and only a few states, including Alabama, Louisiana, Nebraska, North Carolina, Oklahoma, and Texas, have relaxed their regulations. However, Louisiana's changes are limited to farm and timber use.

Additionally, many states impose sales tax on dyed diesel instead of fuel tax, complicating the potential savings for users. The federal tax is reportedly deferred rather than eliminated, meaning that those who switch to dyed diesel could face future tax liabilities. De Haan anticipates that large trucking fleets will likely avoid using dyed diesel due to the complexities of navigating varying state laws and the lack of availability at major truck stops. He concluded that while the order appears significant, its practical impact on diesel prices will be limited and uneven.

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Source: KLEA News