Dyed diesel is a concept so bizarre that it sounds like an urban legend: Turn your diesel red, and the government will overlook your fuel taxes.
But it’s true.
In the current $7-per-gallon diesel market, the federal government is promoting dyed diesel as a cost-cutting measure. At first glance, this colorful idea may seem like the relief that many carriers have been hoping for.
However, upon closer examination, this shimmering red promise may look more like bad blood.
Here’s everything you need to know about dyed diesel.
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What is Red Diesel?
In terms of ‘what’ dyed diesel it is, it is diesel… dyed red. That’s it.
In terms of ‘what red diesel does’, it is intended for tractors, generators, and other off-road machines to indicate a tax exemption. The fuel is dyed red to expose any over-the-road carriers trying to get away with its use.
Normally, using dyed diesel on highways constitutes tax evasion. However, thanks to a recent federal bill, dyed diesel has been sanctioned for over-the-road use through December 31.
Unfortunately, that use comes with a fair number of asterisks.
Will it Trim Your Fuel Bill?
Will dyed diesel save you on fuel? The answer is a firm, resounding maybe.
There are several major caveats to the bill you should be aware of:
- The IRS has yet to confirm the bill’s validity. So… it’s not even official yet.
- If passed, the 24.4-cent tax isn’t forgiven; it’s That means somehow, someway, you’ll still need to pay up.
- State laws still apply. If you primarily run intra-state, this bill can be a major boon for your fuel bill. However, if you, like so many others, ship interstate, the disparity in state legislation may leave you with a fine that outweighs your savings.
- Many truck stops simply don’t provide dyed diesel at all.
For some, dyed diesel may prove to be a huge relief. For others, the savings will likely be negligible.
The Bigger Picture
No matter how many cost-saving initiatives are enacted, the underlying issue remains: Without a change in supply, fuel prices will remain the same.
Opponents of the bill regard the fix as a band-aid on a cannonball wound, criticizing the action’s lack of scope under such brutal financial conditions. These critics also note that tax exemptions can exacerbate other industry issues, draining infrastructure funds that are working to combat the parking crisis.
Regardless, it is universally true that prices will remain elevated until the fuel supply is restored.
A Permanent Solution
Eventually, the dye will fade, but the savings from a fuel card continue mile after mile.
With fuel prices projected to stay elevated for the foreseeable future, nothing saves your budget better than a fuel card that takes dollars off every gallon of fuel.
To get started with the England Carrier Services fuel card in four easy steps, click here.
Dyed diesel is a federal effort to aid carriers with fuel cost relief. Though its promises of tax exemption are enticing, they should be weighed with consideration of the bill’s many stipulations. For a more reliable way to save on fuel, consider using a fuel card.
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