Truckers slow to use dyed-diesel tax break; analyst says it won't move prices
The emergency move letting farmers and some highway vehicles run untaxed red-dye diesel is getting little interest from truckers. FreightWaves reports few in freight are rushing to use it. An analyst told TradingView the policy will have little effect on what carriers actually pay.
The dyed-diesel order
Governor JB Pritzker declared an emergency in Illinois and President Trump signed an executive order, both aimed at high diesel costs during corn harvest. The idea is to let registered highway vehicles burn dyed diesel, which normally skips the road tax and is reserved for off-road use like farm equipment.
Mark Bunselmeyer, a Maroa farmer and president of the Illinois Corn Growers Association, said growers are grateful for the relief this fall. Oklahoma officials are chasing the same thing.
For farmers running combines and grain trucks, the saved road tax is real money. For a freight carrier, the math is thinner. Bunselmeyer himself said a lot of details still need to be worked out before the Illinois policy can run. Until those are settled, most fleets are sitting on their hands, which is why FreightWaves called the reaction a big yawn.
Why diesel costs more than gas
Diesel used to be the cheaper fill. Now it is well above gasoline, Forbes notes, and the gap is why governors and the White House are stepping in. Diesel moves freight and farm equipment, so when it climbs the cost shows up in surcharges and shipping rates.
The dyed-diesel break only touches the tax piece, not the underlying price of the fuel. An analyst told TradingView that is why the effect on pump and rack prices looks small. The road tax is one slice of the total, and cutting it does not change what refiners and wholesalers are charging.
Some buyers got ahead of it. TribLIVE reports school districts locked in wholesale diesel orders early and dodged a price spike, a reminder that forward buying still beats waiting for a tax fix.
The Cuba seizure
Federal agents intercepted 90 consignments of biodiesel worth nearly $3 million headed to Cuba, CBS News reported Wednesday. The shipments were bound for Enetec S.A., a Havana wholesaler that OFAC sanctioned in July. HSI and CBP are running a widening probe into US fuel reaching the sanctioned firm. For US haulers the volume is small, but it signals tighter export scrutiny on biodiesel.
What to watch
Whether Illinois publishes workable rules for dyed diesel in highway trucks, and whether more states follow Oklahoma. Watch the diesel-to-gasoline spread, since it is driving both the political relief and the surcharge pressure.