Truckers Get Tax-Free Farm Diesel In ‘Unprecedented Step’ As Wartime Prices Head For Record Yearly Jump

President Donald Trump opened tax-free farm diesel to highway trucks, but the federal tax is only postponed and most big diesel states have not followed.

Trump signed an executive order at a campaign rally in Grand Island, Nebraska, Monday night that temporarily allows drivers to use dyed diesel — normally limited to farm equipment and other off-road uses — on highways. The order directs the Treasury Department to defer the federal excise tax on that fuel through Dec. 31 without interest or penalties and to look for ways to eliminate it, according to a White House fact sheet.

Trump called the order “another unprecedented step to bring down costs,” the White House said. Diesel is up about 77 percent this year, putting it on pace for the steepest yearly rise in American Automobile Association (AAA) records dating to 2000, CNN reported.

“President Trump’s war of choice on Iran is the sole cause of the diesel fuel price crisis,” Steve Hanke, a professor of applied economics at Johns Hopkins University, said in a statement to the Daily Caller News Foundation. “It doesn’t take rocket science to figure out that the only way to solve the crisis is to stop the war.”

“Increasing on-road fuel supplies by enabling access to dyed diesel volumes currently restricted to off-road use could reduce prices,” Kevin Book, managing director at ClearView Energy Partners, said told the DCNF in a statement.

But the order “does not necessarily eliminate the $0.244/gal in ‘back-up’ federal taxes that would be due,” Book said. It appears instead to defer the tax, suspend penalties for those who do not pay it and buy the White House and Treasury time to find a way to eliminate it, which he said “looks likely to require an act of Congress.”

“The EO [executive order] directs temporary penalty relief and potential tax deferral, not outright tax forgiveness,” American Trucking Associations Chief Advocacy and Public Affairs Officer Henry Hanscom said in a statement to the DCNF. “Carriers need clear federal and state guidance on eligibility, reporting, and any taxes that remain payable.”

“Dyed diesel also comes from the same underlying supply, so expanding its highway use does not create additional fuel or address the underlying supply crunch that is driving prices higher,” Hanscom added.

The Treasury Department did not immediately respond to the DCNF’s request for comment.