U.S. States Take Steps to Curb Diesel and Gasoline Prices

U.S. states are taking a range of steps to curb diesel and gasoline prices that have soared in recent months due to supply disruptions stemming from the U.S. war with Iran, Ukrainian strikes on Russia’s refineries, and dwindling global inventories.

Diesel hit a national average record of $6.53 a gallon recently, according to AAA data. Grand Rapids-based fuel distributor Crystal Flash says Michigan highway diesel was $6.71 for delivery last week, compared to off-road dyed diesel at $5.95 per gallon, up nearly 96 percent from six months ago.

The Trump administration and Republican candidates in some of the tightest election races are looking for ways to bring down diesel prices without disrupting fuel supplies or creating ​additional costs elsewhere in the economy, as November’s midterm elections approach and President Donald Trump’s economic approval ratings remain under strain.

The White House is considering regulatory relief that would allow broader sales of red-dyed diesel, a move that could allow some buyers to avoid the federal fuel tax, while Trump said last week that he backed a ban on diesel exports. Red-dyed diesel is generally reserved for off-road uses such as farming and is exempt from most federal fuel taxes.

Leaders of G7 nations recently announced a coordinated effort to stabilize energy supplies. Plans include releasing as much as 100 million barrels of diesel and crude stocks over the next four months. A substantial diesel release is expected within the first 20 days, and global production increases are being encouraged. The group is also calling for an immediate and full restoration of rights through the Strait of Hormuz.

Here are some of the steps states have taken:

• Alabama: Alabama recently said it would halt the enforcement of restrictions on use of red-dyed diesel for 120 days.
• California: The state suspended California’s seasonal summer-blend gasoline requirement for the remainder of the season and directed state agencies to allow winter-blend gasoline to be manufactured, imported, distributed, and sold in the state immediately.
• Georgia: Georgia recently suspended the state gasoline and diesel tax for 30 days and suspended weight restrictions on commercial vehicles to reduce the cost of transporting goods.
• Illinois: The state’s governor paused a 1.3-cent increase in the gasoline tax for six months this past summer.
• Indiana: The state suspended its sales tax on gasoline.
• Kentucky: In May, the governor signed an executive order reducing the gasoline tax by 10 cents, freezing any increases in gasoline taxes and any increases in motor vehicle property tax in 2027.
• Louisiana: The state recently said it would allow farmers and timber harvesters to use the dyed diesel fuel in highway vehicles.
• Massachusetts: The governor plans to file legislation to temporarily suspend the state’s 24-cent-per-gallon tax on gasoline and diesel for two months beginning seven days after passage. Retailers would be required to reflect the temporary suspension in prices at the pump, and gasoline station owners would be protected from losing money on fuel sold at the reduced price.
• Michigan: The state’s governor temporarily waived an environmental rule, allowing regional gasoline stations to sell cheaper, higher-vapor winter blends and E15, a gasoline blend containing up to 15% ethanol, through the summer.
• Montana: The state waived certain hours-of-service rules for intrastate gasoline and diesel haulers.
• Nebraska: The state allowed highway-registered vehicles to use untaxed dyed diesel fuel without facing state fines or penalties. The governor also said that diesel taxes paid while transporting Nebraska’s seasonally produced products and livestock on state roads are eligible for a refund and eased weight limits for seasonal crop transport.
• North Carolina: The state said it would provide penalty relief from prohibition on the highway use of red-dyed diesel fuel through the end of 2026.
• Ohio: The state suspended its gasoline and diesel tax for 90 days.
• Oklahoma: The governor paused enforcement of all taxes, regulations, and fines levied on the use of red-dyed diesel in farm vehicles and in highway vehicles for 120 days.
• South Dakota: The state permitted farmers and haulers to transport crops, livestock, and other agricultural commodities to do so at up to 10% above standard highway weight limits and temporarily waived the $25 overweight trip permit fee. It also directed the Department of Revenue to monitor fuel supplies and determine if a tax refund to suppliers is warranted if regular diesel needs to be used in farm machinery because of potential shortages of dyed diesel.
• Texas: The governor expanded the use of dyed diesel on Texas roads, raised the allowable weight for fuel, agricultural and timber, and suspended the state’s low-emission diesel fuel regulations to reduce emissions of nitrogen oxides from diesel-powered motor vehicles and non-road equipment.

EDITOR’S TAKE:

This article should indicate how the recent increases in diesel prices have become a real topic of discussion among farmers and others. Increased commodity prices are rapidly being offset by rising diesel prices and, thus, squeezing profit margins. The measures being taken by all the various states will certainly provide some relief but will not completely offset the impact of rising diesel prices. However, you, as a CAD member, have a secret weapon called AgPack®. AgPack can help offset some of the pain from those diesel price increases by offsetting other operating costs. The program provides up to nearly $50,000 in exclusive rebates and discounts. Now is the time to promote AgPack to every farm/ranch customer in your area!