Trump's Tax-Exempt Diesel Draws Skepticism From Farmers: 'Not Worth the Risk' as State Fines Loom

Reuters reported on October 22 that farmers say the savings from using red-dyed diesel in highway semi-trucks are too small to justify the risk of dye residue and state penalties — Kansas alone can fine violators $1,000 to $10,000 — even as the IRS waives federal penalties from October 1 to December 31.

Awaaz Punjab Investigations Desk22 October 20264 min readRead in all 3 languages

CHICAGO — US President Donald Trump signed an executive order this month to expand access to tax-exempt diesel as soaring prices frustrate voters ahead of the midterm elections, but farmers say it is too risky to use the fuel on public roads, while some other drivers do not have access to it, Reuters reported on October 22.

Red diesel is essentially the same as regular or clear diesel but exempt from highway fuel taxes, and is dyed red to indicate highway taxes have not been paid. Under the order, farmers could use red diesel to haul crops to market in semi-trucks normally fuelled by clear diesel, if allowed by states. The Internal Revenue Service said it would not impose a penalty when dyed diesel is used on highways from October 1 to December 31, but Trump's order had no effect on state taxes and penalties, Reuters reported.

"In my mind, it's not anywhere near worth the risk," said Glenn Brunkow, president of the Kansas Farm Bureau, who raises crops and cattle near Wamego, Kansas. "That residue might be in there for years." In Kansas, violators can be charged with a felony, have their driver's licence suspended, and face penalties of $1,000 to $10,000, according to the Kansas Department of Revenue, and Governor Laura Kelly said the state could not legally implement the order as drafted.

The price pressure behind the order is documented separately: Heavy Duty Trucking reported on October 20, citing US Energy Information Administration figures, that national on-highway diesel averaged $6.276 a gallon in mid-October, up $2.656 from a year earlier, while California diesel reached $8.242 a gallon — and the American Trucking Associations' chief economist Bob Costello told the ATA conference he did not expect much relief. For Punjabi truckers running I-5, I-80 and other corridors, that gap between a federal waiver and state enforcement is the practical point: a federal no-penalty window does not remove state fines.

Access is also limited. Iowa Governor Kim Reynolds allowed dyed diesel on highways until February only for vehicles hauling specific agricultural products, Texas drivers must register with the state, and a Reuters reporter who visited four Houston-area sites listed as selling red diesel found three sold only commercial diesel and the fourth site's red-diesel pumps were not working. Trump also announced an $8 billion support programme on Monday to offset diesel costs for farmers during the autumn harvest, Reuters reported. Sources: Reuters, October 22, 2026, via SRN News; Heavy Duty Trucking (TruckingInfo), October 20, 2026, citing EIA data.