New executive order expands use of red-dyed-fuel amid high fuel costs
LINCOLN, Neb. (KLKN) – Red dyed diesel fuel is typically reserved for farm equipment and meant to for use off-road, or off of highways.
Often ordered directly from oil distributors, the colored diesel has no sales tax applied as a way to help agricultural transporters save on costs.
In light of historically high diesel costs, President Donald Trump signed a new executive order on Monday which allows additional truckers to purchase the tax-free fuel for use on highways too.
“The biggest thing is it’s a tax break for the semi-truck drivers over the road are able to use the red dye fuel now so they can take advantage of that sales tax savings as well,” said Andy Goodyear, with Honda of Lincoln.
Goodyear, who has worked with vehicles of all types for 30 years, says there is no sales tax on red dyed fuel, which is usually about 25 cents a gallon.
He also says there is no chemical difference between clear diesel and diesel dyed red.
“There’s no risk for using the red dye in a vehicle, as far as [it] voiding warranty, those sorts of things; clogging up fuel filters and injectors. It’s just a dye. It’s not going to hurt anything to use it,” said Goodyear.
He says the purpose of adding color is so that highway inspectors can monitor who uses it, since the tax-free fuel was meant to help farmers specifically save on costs.
Some experts do warn of dye stains, although not damaging to the way a vehicle operates.
After President Trump’s decision to expand usage to highways, it means being caught with the dyed diesel has no federal penalties.
Governor Jim Pillen also dropped the state penalties previously associated with the use and signed his own order on September 24th.
Both decisions will temporarily remain in place until December 31st of this year, hoping fuel prices will drop.
“Basically, you know, these people are being able to take advantage of this right now but at the end of the year, it’s going to go back to the way it was before,” said Goodyear.
“If you’re using it after the end of the year, you are subject to maybe a big fine,” he adds.
Fines that would vary from $100 for a first-time offender, $250 if it happened again within five years and $2,500 for a third offense.
One trucker who didn’t want to go on camera told Channel 8 that he sees potentially thousands of dollars in savings before the end of the year is up.
Channel 8 will be monitoring the results of this decision and its ability to help drivers save.
