Energy industry groups are warning that a new move by the Trump administration to make diesel fuel cheaper could come with its own set of risks.
President Donald Trump signed an executive order Monday to expand the availability of certain tax-free diesel fuels, which are typically only used in off-road applications like farm vehicles.
The fuel is sometimes called "red-dye" diesel, due to the coloration added to it before it's sold. It's subject to its own regulations and tax scheme based on its intended use, and many industry groups are now warning that selling it as regular fuel may cause new complications for retailers and consumers.
After the executive order took effect, Energy Marketers of America noted that it only directs the Treasury to "defer certain diesel fuel tax payment obligations," which may cause uncertainty about what tax is owed or when.
“Whether relief is available, whom it covers, and on what conditions depend on Treasury determinations and guidance not yet issued,” EMA said.
The dyed fuel is still also subject to standing EPA regulations.
The Society of Independent Gasoline Marketers of America and the National Association of Truck Stop Owners warned that the fuel's dye may also accumulate in engines and fuel tanks that weren't designed to burn it.
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The executive order expands efforts already underway in some states to make red-dye diesel easier to use.
In September in Texas, Republican Gov. Greg Abbott announced the state would allow the fuel on its roads, and asked the EPA to grant a temporary waiver to relax sulfur restrictions on diesel sold in Texas.
