President Donald Trump’s initiative to reduce rising diesel prices gained momentum on Tuesday as West Virginia declared a statewide emergency, allowing truck drivers to utilize fuel that is typically set aside for farmers and heavy machinery.
Governor Patrick Morrisey announced a 60-day state of emergency for all 55 counties, which momentarily lifts penalties for using red-dyed diesel on public roads. This action builds on Trump’s executive order from October 5, which permitted temporary federal relief for using this type of fuel on highways, although it still remains unclear if companies will ultimately need to pay for deferred federal taxes.
“Transportation costs impact the prices we see at grocery stores and across the economy,” Morrisey noted during his announcement. “We’re providing businesses and citizens the chance to lower those costs, which should benefit families in West Virginia.”
Red-dyed diesel, usually reserved for tractors and construction machinery, is generally less expensive than standard highway diesel due to its tax treatment. Morrisey’s office estimates that this new measure could save drivers about 20.5 cents per gallon, which translates to around $41 for a 200-gallon tank.
Morrisey has not yet responded to requests for comments.
Even with Trump’s executive order, fuel distributors and truck stops have been cautious about selling red-dyed diesel, worried they might bear the burden of deferred federal fuel taxes.
Diesel prices in West Virginia have soared to $6.34 per gallon on Tuesday, a sharp rise from $3.57 a year ago, according to data cited by the governor’s office. Elevated fuel prices pose a threat to essential deliveries, agriculture, and emergency services, with industries such as coal, natural gas, and forestry being particularly affected.
On October 5, Trump signed an executive order regarding red-dyed diesel, directing the Treasury Department to consider deferring the federal excise tax of 24.4 cents per gallon until December 31, while also exploring the possibility of eliminating that tax altogether. However, fuel companies have been hesitant to engage in this without guarantees they won’t be left responsible for the costs.
Prior to this, White House spokesperson Taylor Rogers stated, “President Trump’s executive action will swiftly reduce diesel costs by allowing the highway use of tax-free dyed diesel and deferring the federal diesel excise tax until year-end.”
The IRS announced on October 14 that it would halt federal penalties and inspections on dyed diesel usage for highway purposes until December 31 while additional advice on delaying tax payments is anticipated. They are also looking into ways to remove deferred tax responsibilities.
Kevin Book, managing director of ClearView Energy Partners, commented that expanding highway access to red-dyed diesel could help lower prices, but completely eliminating the federal tax obligations would likely require congressional action.
The American Trucking Associations echoed the sentiment, cautioning that allowing dyed diesel on highways doesn’t create more fuel supply or fix the shortages that are driving prices up.
The coal sector in West Virginia welcomed Morrisey’s announcement, indicating that increasing fuel prices have added burdens to an already struggling industry.
“The dramatic rise in fuel costs for surface mining and coal transportation has intensified challenges for West Virginia coal,” remarked Chris Hamilton, president and CEO of the West Virginia Coal Association. “This suspension will alleviate cost pressures and aid our competitiveness in a tough market.”
Meanwhile, James Smith, executive director of the West Virginia Forestry Association, warned that soaring operational costs are threatening the viability of logging businesses.
Rebecca McPhail, president of the Gas and Oil Association of West Virginia, commended the temporary flexibility, stating that rising fuel prices are increasing stress for producers, contractors, and service firms.
The state’s motor fuel excise tax and safety inspections for commercial vehicles will still be in effect, according to the governor’s office.
The emergency declaration is effective immediately and will last for 60 days, unless terminated earlier, while the federal relief for red-dyed diesel is set to end on December 31.
