Diesel Prices Soar: When Will Relief Finally Arrive?
States are taking different approaches to ease the impact of elevated diesel prices on trucking, including temporary fuel-tax measures, expanded use of dyed diesel in Texas and proposed relief programs for carriers and farmers. The changes vary by state, and some do not eliminate the underlying fuel-tax obligations.
Georgia fuel-tax holiday affects IFTA reporting
State officials say motor carriers subject to the International Fuel Tax Agreement do not have to pay fuel taxes on miles traveled in Georgia during the state’s fuel-tax holiday. Qualifying fuel purchased in Georgia also does not count toward the carrier’s quarterly IFTA calculation.
The holiday also suspends the state’s fuel-use tax, which is assessed based on the miles a truck travels in each jurisdiction. Carriers will need to follow state guidance regarding the applicable reporting requirements during the temporary suspension.
Texas allows dyed diesel for road use
Texas has temporarily allowed farmers and truckers to use dyed diesel on public roads. The fuel is chemically similar to clear diesel but is typically sold without state motor-fuel taxes and is normally restricted to off-road applications, including farming and construction.
Because dyed diesel is untaxed, Texas law ordinarily prohibits its use on public roadways. The governor’s proclamation suspends those restrictions and related penalties during the temporary measure, but it does not waive the underlying fuel tax.
The state also is allowing fuel, crop and timber loads to move at higher weights under the temporary provisions. Officials said the measures are intended to reduce costs for agricultural and freight operations.
Other states consider fuel-tax relief
Ohio Gov. Mike DeWine’s office said he plans to sign legislation suspending the state’s 38.5-cent-per-gallon gasoline tax and 47-cent-per-gallon diesel tax through the end of the year.
In Iowa, U.S. Rep. Ashley Hinson has called for Congress to return before the midterm elections, pause diesel exports and suspend the federal fuel tax. She also has proposed a diesel-relief program for farmers and truckers.
Industry analysts have noted that tax reductions can lower operating costs but do not increase the nation’s diesel supply. Patrick De Haan, head of petroleum analysis at GasBuddy, said farmers already use untaxed dyed diesel and that expanding its use to truckers could reduce their tax burden without addressing supply imbalances.
High fuel costs pressure carriers and drivers
Truck drivers in Nevada told KTVN-TV in Reno that higher fuel prices have affected how often they return home and whether they accept loads they previously would have taken.
Some carriers can pass higher fuel costs to customers through fuel surcharges, while others remain subject to contracts with capped fees or agreements signed before prices increased. Contracted freight moved by larger fleets often includes a surcharge tied to average diesel prices. Smaller carriers frequently compete for spot-market loads arranged through brokerages, where pricing can change from one shipment to the next.
Lewie Pugh, vice president of the Owner-Operator Independent Drivers Association, said fuel is one of the largest operating expenses for owner-operators. He also said reports of a coordinated trucker strike were unfounded and warned that such action could expose participants to civil lawsuits and potential antitrust violations.
