Truck stops warned against red-dyed diesel sales: ‘Limited upside’

Truck stops were warned by industry groups against selling red-dyed diesel , saying there is “limited upside” to its sale following reported record-high diesel prices across the U.S.

“The White House appears to be trying to encourage the supply chain to move toward selling dyed fuel in non-traditional ways,” the Society of Independent Gasoline Marketers of America (SIGMA) and the National Association of Truck Stop Owners (NATSO) said in a note to their members, according to NBC News . “We do not expect most reputable diesel retailers and fuel marketers to do this … first, the tax is still owed, so there’s limited upside.”

SIGMA and NATSO added, “The logistical challenges outweigh any visible upside: Residual dye lingers in tanks and fuel systems.”

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They concluded that for fuel sellers the “liability and customer risk outweigh any temporary, uncertain benefit,” per NBC News.

President Trump announced earlier this week various directives aiming to increase the availability of red-dyed diesel and lower diesel prices. This diesel simply has red dye added to it to signal that it is tax exempt and is typically used in machines such as farm and construction equipment.

The coloring also helps “law enforcement … identify it to enforce penalties and back taxes for on-road use,” a fact sheet from the White House explains.

Under the executive order, the red-dye diesel tax is “deferred,” halting enforcement by the IRS from Oct. 5 to Dec. 13, according to a White House official. The order directed the IRS to “explore avenues, including legislation, to eliminate the obligation to pay” the deferred taxes.

The official continued that the Treasury Department and the IRS are preparing guidance on tax relief related to this order for taxpayers to reference.

Another group, Energy Marketers of America, criticized the order and warned gas stations to “proceed with caution,” according to NBC News.

“Whether relief is available, whom it covers, and on what conditions depend on Treasury determinations and guidance not yet issued,” the group said. “Deferral is not forgiveness.”

When asked about the industry group’s remarks, White House spokesperson Taylor Rogers said, “President Trump’s executive action will quickly cut diesel costs by authorizing highway use of tax-free dyed diesel and deferring the federal diesel excise tax through the end of the year.”

“This will put money directly back into the pockets of American truckers, farmers, and workers—providing savings of as much as $100 per fill,” she continued.