Diesel prices hit record highs

Diesel fuel costs are hovering above six dollars per gallon amid the ongoing Iran war, creating pressure on truckers and farmers nationwide.

Trump defers red diesel taxes

President Donald Trump signed an executive order this week deferring taxes on red-dyed diesel, a fuel typically used only by farmers and truckers, through the end of the year.

How red diesel works

Red-dyed diesel is exempt from highway fuel taxes and illegal to use on public roads. The red dye lets inspectors detect tax evasion. The deferral relieves a tax burden of twenty-four point four cents per gallon.

White House claims savings

White House Spokesperson Taylor Rogers said the executive action will quickly cut diesel costs and save truckers more than one hundred dollars per fuel refill by putting money directly back in their pockets.

“will quickly cut diesel costs and put money directly back into the pockets of American truckers”

Experts call it lipstick on a pig

Patrick De Haan, head of petroleum analysis at GasBuddy, told Fortune the deferral does not add supply globally or improve the reasons for high prices. It is political posturing, not a real solution.

“This dyed diesel waiver, it doesn't add supply globally. It doesn't improve the reasons that have led to high prices. It would be more akin to lipstick on a pig.”

Truckers worry about future bills

The Society of Independent Gasoline Marketers of America and the National Association of Truck Stop Owners warned members that a tax deferral is not a tax break. The tax is still owed, leaving limited upside.

“We do not expect most reputable diesel retailers and fuel marketers to do this. First, the tax is still owed, so there's limited upside.”

Red diesel is rarely available

Red-dyed diesel makes up only about thirty percent of fuel used by commercial vehicles and is rarely stocked at truck stops. The White House said more than four thousand retailers distribute it, but availability remains limited.

“It's rarely a truck stop fuel. Even if you wanted to find this, it may be kind of like a diamond in the rough to find.”

Real solution requires geopolitical change

Analysts agreed that solving high fuel prices requires ending wars in Iran and Ukraine. David Russell at TradeStation Group said if Middle East conflict ended, bottlenecks could ease and prices might fall on their own.

“The real solution to this situation is ultimately the supply and demand in the market. It would not be because of this measure with red diesel.”

Experts doubt the move will work

Patrick De Haan fears gas prices could spike if Ukraine attacks Russian oil refineries again. He said the president is scrambling ahead of midterms but the red diesel deferral is unlikely to move the needle on prices.

“The president is scrambling ahead of the midterms to do something, but I just don't know that this is really a needle mover in my mind.”