White House Weighs Red-Dyed Diesel Relief as Fuel Prices Soar
The U.S. federal government has come up with an alternative to a diesel fuel export ban that could alleviate the price pain at the pump by boosting the availability of a tax-free sort of diesel. That’s according to unnamed sources quoted by Reuters this week. It is unclear if the idea is a replacement for the ban or will complement it, should a ban be approved. The fuel in question is red-dyed…
The U.S. federal government is considering a solution to alleviate soaring diesel fuel prices by expanding the availability of red-dyed diesel, according to unnamed sources. This type of diesel, also known as off-road diesel, is tax-free and is primarily used in agriculture and construction. Red-dyed diesel is exempt from federal excise duty, making it cheaper than the diesel sold for general use.
With diesel prices hitting record highs due to supply constraints from the Middle East, increasing the availability of red-dyed diesel could potentially lower prices by nearly $0.244 per gallon. However, some experts, like Patrick De Haan from GasBuddy, argue that this would not have a significant impact on prices as it does not improve supply or affect demand.
The situation is complex, with no easy solution available, as the federal highway tax burden for broad-use diesel fuel currently stands at $0.244 per gallon.
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