MARANA, Ariz. (KGUN) — To help cut diesel costs President Trump ordered a temporary rule to allow any driver to use red diesel—tax free fuel reserved for off road use like farming. A farmer thinks that could make growing our food even harder
With two large farms to run, Arnold Burruel had a big diesel bill even before fuel prices blew up.
“We harvest during the heat of the season every 21 to 24 days. Our historical budget of $850 per acre for harvest has probably ballooned up to no less than $1200 now.”
The cost of typical diesel from a truck stop or gas station includes 24.4 cents a gallon in Federal tax to pay for roads.
But as long as farm equipment never goes on the road it’s exempt from that tax.
Off road diesel is dyed red so trucking regulators can catch drivers using tax exempt diesel. Fines can start at a thousand dollars and go up from there.
But to cut fuel costs President Trump signed an order that lets drivers use red diesel on the road through the end of the year. The tax is officially deferred so drivers may have to pay the tax later.
Arnold Burruel says it’s bad news for farmers if on the road truckers start buying the limited amounts of red diesel farmers depend on.
“I'm afraid we're going to end up having to compete against everybody that's going to be allowed into the pool now to use the red diesel. It'll just be more competition and probably, I don't know., it looks like fuel may come down, but it won't come down at the rate that we're expecting, and it may actually hang up at a certain level because of all the demand for it. That is our concern.”
Trucking organizations say letting drivers buy red diesel may not help them much. It’s usually not available where truckers fill up anyway and they’re concerned about the chance of a deferred tax bill later.
The organizations say the real solution is to pump up diesel supplies for everyone.
For Arnold Burruel, soaring fuel prices add more pressure to the squeeze farmers were already feeling from low crop prices, high electricity costs, and cuts to water supplies.
He says as more farmers get out of the business, Americans will have to get comfortable getting more and more of their food from other countries that can produce it at lower cost.
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Craig Smith is a reporter for KGUN 9. With more than 40 years of reporting in cities like Tampa, Houston and Austin, Craig has covered more than 40 Space Shuttle launches and covered historic hurricanes like Katrina, Ivan, Andrew and Hugo. Share your story ideas and important issues with Craig by emailing craig.smith@kgun9.com or by connecting on Facebook and Twitter.
