GRAIN VALLEY, MO. (RFD-TV) — President Donald Trump’s executive order temporarily expanding highway use of red-dyed diesel is drawing attention from the trucking industry, but uncertainty over state requirements could limit its usefulness for drivers who cross state lines.
Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association (OOIDA), said the measure could offer some relief as fuel prices pressure trucking businesses. However, he said truckers need clearer guidance on how the policy applies across different states.
“Every little bit probably helps,” Pugh said. “I mean, mainly in this, there’s just so much confusion because of what states are allowing what.”
What Is Red-Dyed Diesel?
Red-dyed diesel is fuel intended for uses that are exempt from highway fuel taxes, including agricultural machinery and off-road construction and logging equipment.
In his interview with RFD-TV, Pugh explained that the fuel itself is the same as conventional diesel, but the red dye identifies fuel sold for nontaxable use.
“It’s where red dye is put in diesel fuel to mark that it wasn’t taxed for highway and road tax,” Pugh said.
He said federal and state fuel taxes help pay for roads, bridges, rest areas and other highway infrastructure.
“It’s the exact same fuel. It just has red dye in it,” Pugh said.
Truckers Still Face Fuel Tax Obligations
Pugh said commercial truckers face additional complications because they account for fuel taxes across the states where they operate.
Unlike drivers of passenger vehicles, truckers generally report mileage and fuel-tax obligations through systems designed to account for travel across state lines.
Even if a trucker uses red-dyed diesel under the temporary federal relief, Pugh cautioned that it does not necessarily eliminate state fuel-tax obligations.
“Even though you can buy the red-dyed fuel and run it, it doesn’t mean you’re still exempt from paying the highway-use tax,” Pugh said. “You’re still going to have to file taxes in most states.”
State Rules Complicate Implementation
Pugh said states may differ in how they handle the temporary use of red-dyed diesel on highways.
“Some states are going to accept you running red fuel, and other states are not,” he said.
For drivers who operate exclusively within one state, the requirements may be easier to navigate, depending on that state’s rules. Interstate truckers, however, must account for the requirements in the jurisdictions where they travel.
“If you’re crossing state lines as an interstate trucker going all over the place, you’re probably better off not to run red fuel,” Pugh said.
He also noted that state fuel-tax holidays can create additional complications. If a state suspends collection at the pump, drivers may still need to account for taxes owed later.
Pugh said the differences make it important for truckers to understand the rules before changing their fueling practices.
OOIDA Calls for Greater Market Certainty
Pugh said the executive order could provide some relief, but truckers transporting goods across state lines need greater clarity.
“We need market certainty,” he said, adding that the challenges affect both agricultural and commercial trucking because drivers regularly cross state borders while moving goods.
Beyond the temporary relief, Pugh questioned whether fuel companies’ profits deserve greater scrutiny as consumers and businesses face high prices.
“What we really have got to get to, in our opinion, is looking at these oil companies, looking into fuel companies,” Pugh said. “Because while all of us Americans are hurting on paying for fuel, oil companies are making record profits.”
