Red diesel is all about the tax.

 COMPLICATIONS OF TARGETING DYED DIESEL

DISRUPTION IN HEATING OIL SUPPLIES 

 

Trump supposedly made an executive order allowing dyed diesel fuel to be used in trucks, this most likely will not happen. Red dyed diesel is dyed to distinguish it from taxed and non taxed fuel. It is illegal to use dyed diesel on the highways of the nation, the tax is mostly a state tax, which is unlikely to be under Trumps jurisdiction. It is a highway tax to keep the roads maintained, In Pennsylvania the tax is 74.1 cents and the federal tax is 24.4 cents. a total 98. 5 cents. Heating oil and farm and construction fuel is not taxed because it is not used in highway transportation. Heating oil and diesel are interchangeable the dye is just to indicate the untaxed fuel.

 

Trump does have the authority to suspend the 24.4 cent tax on undyed highway diesel, but getting involved in the dyed fuel will be a complicated mess. 

 

Trucks that run dyed diesel on the road will be fined, distributors will be reluctant to fill road used tanks. Stations that put dyed fuel in their tanks will have residual dye in their tanks indefinitely. It may disrupt heating oil supplies right when heating oil is being planned for the winter season. 

 

I suspect we will see a walk back on this and the right legal option would be to suspend the 24.4 cent federal tax on all highway fuel, both diesel and gas, this would be simple to implement and simple to reinstate in the future. 

 

A simple consultation with someone in the fuel business would have saved an embarrassing uninformed move.