How Trump’s Diesel Relief Plan For Farmers Would Work

Diesel is the workhorse fuel of the farm economy. It runs tractors, combines, irrigation equipment and the trucks that move crops. With the national average at $6.382 a gallon in late September, farmers face crushing costs in harvest season.
The core idea is dyed diesel. Diesel for tax-exempt off-road use is dyed red and sold without the federal highway excise tax. Normally it cannot be used on public roads, and the penalty is $1,000 or $10 per gallon, whichever is higher.
States can waive their own penalties, and many have. Alabama, Arkansas, Indiana, Louisiana, Missouri, Nebraska, Oklahoma and Texas have taken steps allowing farm vehicles to use dyed diesel on highways. But federal penalties still apply without IRS action.
The Farm Bureau wants Trump to suspend the 24.4 cents-per-gallon federal diesel tax for farm transport and waive federal penalties. Trump is now moving on that federal side.
A third lever is supply. The G7 has agreed to release 100 million barrels of emergency oil and diesel stocks, with a large share of diesel entering the market in the first 20 days.
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