U.S. fuel prices: Farmers shun Trump's red diesel waiver over risk of state fines

U.S. President Donald Trump has signed an executive order expanding access to tax-exempt diesel as soaring fuel prices frustrate voters ahead of the midterm elections. But farmers say using the fuel on public roads is too risky, while many other drivers cannot get hold of it.

Trump's order temporarily waives the off-road requirement for red-dyed diesel, which is usually sold for farm equipment. Red diesel is essentially the same as regular, or clear, diesel, but it is exempt from highway fuel taxes and dyed red to show those taxes have not been paid.

The Internal Revenue Service said it would not impose penalties for using dyed diesel on highways between 1 October and 31 December. However, it said the order had no effect on state taxes and penalties.

The move is one of several fuel-focused actions Trump has taken as he seeks to lower prices and lift approval ratings. On Monday, he announced an $8 billion support programme to offset diesel costs for farmers during the autumn harvest.

His administration has also relaxed sanctions on Russian fuel shipments, pushed allies to release emergency oil stocks and temporarily lifted restrictions on foreign-flagged vessels moving between U.S. ports. Prices nonetheless remain high because of the U.S.-led war with Iran.

'Not anywhere near worth the risk'

Farmers burn the most diesel during the autumn harvest, running tractors, combine harvesters and other machinery on dyed fuel. Under Trump's order, they could also use red diesel in semi-trucks hauling crops to market, where states allow it.

But farmers said the savings were too small to justify the risk of red residue staying in their fuel tanks after the order expires. States set their own taxes and rules on red diesel and can fine drivers thousands of dollars if inspections find signs of improper use on public roads.

'In my mind, it's not anywhere near worth the risk,' said Glenn Brunkow, president of the Kansas Farm Bureau, who raises crops and cattle near Wamego, Kansas. 'That residue might be in there for years.'

Kansas, a major grain producer, bans dyed diesel on public roads unless it was bought lawfully outside the state. According to the Kansas Department of Revenue, violators can be charged with a felony, have their driving licence suspended and face penalties of $1,000 to $10,000.

The state's Democratic governor, Laura Kelly, said Kansas could not legally implement the order as drafted. In a statement, she said the Kansas Highway Patrol was concerned it 'would result in law enforcement difficulties once red dye diesel returns to its normal usage restrictions'.

Democrats hope rising farm costs will help them win back support in the Republican heartland in November's midterms.

White House spokesperson Taylor Rogers said Trump wanted lower fuel prices. 'President Trump remains committed to unleashing American energy dominance, cutting costs, and putting more money back in the pockets of hardworking American families,' she said.

Jay Sorg, a fifth-generation farmer in New Richland, Minnesota, said the order could save him $1,500 to $2,000, which is not enough to offset higher costs for fuel and other inputs. Like many farmers, he buys diesel in advance and stores it in tanks.

'In the grand scheme of our business, it's kind of inconsequential, especially when we already have fuel bought and in the tank for highway use,' Sorg said. 'It's a move to try to win votes.'

Ryan Wagner, a farmer in Roslyn, South Dakota, warned that wider use of tax-exempt red diesel could drain the government funds used to maintain roads. 'It's a very short-sighted plan that could come back and haunt us in the future,' he said.

Hard to find

Other motorists are struggling to get hold of red diesel at all.

In Iowa, Republican Governor Kim Reynolds has issued a proclamation allowing vehicles to use dyed diesel on highways until February, but only when they are hauling specific agricultural products. In Texas, drivers must register with the state to benefit from a temporary suspension of the restrictions.

Reuters visited four sites around Houston listed online as selling red diesel. Three sold only commercial diesel. At the fourth, the red diesel pumps were not working, and a notice said the fuel was purely for agricultural use and should not be used on roads.

Vincenzo Lasalosi, a Houston firefighter, said high prices had led him to consider using red diesel in his Ram 2500 truck, but he did not know where to find it.

'Even if I do find it, it's probably too far and not worth the drive to fill it up,' he said.

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