Truck stops across the country were warned Tuesday by a major industry group to “proceed with caution” after President Donald Trump signed an executive order promoting the use of “red dye” diesel fuel.
Red dye diesel is exempt from federal excise taxes because it is intended for farm equipment and other off-road uses.
The order signed before farmers in Nebraska on Monday night aims to reduce fuel prices by “temporarily” allowing the use of red dye diesel fuel on the highway. According to a statement from the White House.
American voters are deeply frustrated with high gas prices and the Trump administration is under intense pressure to lower fuel prices ahead of the November 3 midterm elections.
Monday’s order directs Treasury Secretary Scott Besant “to defer certain diesel fuel tax payment obligations and provide penalty relief to the extent permitted by law.”
It does not waive federal taxes, as only Congress can abolish any tax.
Following Trump’s directive, America’s Energy Marketers warned gas stations to “proceed with caution.”
“Whether relief is available, who it covers, and under what conditions depends on Treasury’s determinations and guidance that have not yet been issued,” the group said. “Adjournment is not forgiveness.”
Additionally, the order does not “address EPA or state restrictions” on dyed varieties of diesel fuel, the EMA said.
Other trucking and gas industry groups took similar precautions.
“It appears that the White House is trying to encourage the supply chain to sell fuel dyed in non-traditional ways,” the Society of Independent Gasoline Marketers of America and the National Association of Truck Stop Owners said in a note to their members.
“We don’t expect most reputable diesel retailers and fuel marketers to do this,” he said. “First of all, taxes are still owed, so there is limited benefit.”
Furthermore, “the logistical challenges outweigh any visible benefits: residual dye remains in tanks and fuel systems.”
For most fuel sellers, “liability and customer risk outweighs any temporary, uncertain profit.”
The White House did not immediately respond to a request for comment.
A group representing independent long-haul truckers also suggested Trump’s move would provide little benefit to its members.
Todd Spencer, president of the Owner-Operator Independent Drivers Association, said, “Allowing widespread use of red-tinted diesel will provide minimal relief. Market stability is necessary to reduce costs over the long term.”
Since the war with Iran began, the price of diesel has risen from $3.76 a gallon to $6.32 as of Tuesday, an increase of nearly 70%.
The Iran conflict isn’t the only conflict contributing to the skyrocketing price of diesel.
Recent escalation of the Ukraine–Russia war has included Ukrainian drone attacks on Russian refineries.
Russia, traditionally one of the world’s largest diesel exporters, responded to the attacks by imposing a diesel export ban until at least the end of October.
Trump has urged Ukrainian President Volodymyr Zelensky to stop attacks on Russia’s diesel infrastructure.
“Mr. Zelensky has to do one thing. He has to stop draining diesel fuel in Russia,” Trump told reporters in early September. “There are plenty of other targets. Don’t attack diesel fuel, because it’s hurting the world.”
Oil prices have also increased rapidly since the beginning of the year. Brent crude oil, which was trading above $101 a barrel on Tuesday night, has risen more than 66% since the beginning of the year.