The White House is weighing an unusual plan to help ease soaring diesel costs, but some states have already moved to expand access to what is considered a significantly cheaper fuel source: red-dyed diesel. According to , the Trump administration is considering regulatory relief that would allow broader sales of red-dyed diesel, a fuel traditionally reserved for agricultural and other off-road uses. On Sunday, President Donald Trump told a Fox News reporter that he is "very seriously" considering a ban on diesel exports.
However, the red-dyed diesel proposal is being discussed as an alternative to a diesel export ban and could allow some buyers to avoid federal fuel taxes, helping lower costs amid today’s record-high diesel prices. Diesel is the backbone of much of the American economy, powering everything from freight trucks to farm machinery and construction equipment. When diesel prices rise, transportation companies often pass those costs along to customers, which often leads to higher prices for food and other essentials.
Red-dyed diesel is chemically similar to conventional diesel fuel but contains a red dye that identifies it as fuel intended for off-road use. But because it is generally exempt from federal and state highway fuel taxes, its use on public roads is normally prohibited and can result in severe penalties. However, the White House proposal would expand the circumstances under which the fuel could be sold or used, potentially lowering costs for both consumers and businesses.
"This measure can shave roughly 4 percent off today’s diesel bill through federal tax relief alone, and potentially 5–6 percent if additional state tax relief applies,” Maksim Sonin, an energy executive and a Visiting Scholar at Stanford's Precourt Institute for Energy, told Newsweek. The fuel is commonly available from agricultural fuel suppliers and farm co-ops. Bulk fuel distributors and commercial fueling depots likewise sell this type of diesel, as do some truck stops and fuel stations across the country.
However, buyers generally must certify that the fuel will be used for qualifying off-road purposes. But if the White House acts, all that could change. Louisiana became one of the first states to temporarily loosen restrictions amid the recent diesel price surge.
Governor Jeff Landry issued an emergency order on September 23 allowing Louisiana farmers and timber harvesters to use dyed diesel they already have on hand during harvest season, when fuel consumption typically peaks. According to the governor's office, the order suspends penalties through October 22 for certain farm-use and timber vehicles. The administration said diesel prices in Louisiana had reached a record $6.03 per gallon.
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