Texas Declares Emergency to Bring Down Diesel Prices

Texas Gov. Greg Abbott issued a statewide disaster proclamation easing fuel-use rules and certain weight restrictions in an effort to relieve pressure on the trucking and agricultural industries.

For truckers and fleets, one of the biggest changes is the ability to use dyed diesel — also known as “red diesel” — on Texas roads, something that is normally prohibited.

The move comes at a particularly difficult time for people who make their living on the road. According to AAA, the average price of diesel in Texas was $5.86 per gallon on September 28, up from $5.21 a month earlier and $3.17 a year ago.

And the problem extends beyond Texas. The latest data from the U.S. Energy Information Administration (EIA) shows just how much rising diesel prices have once again become a major concern for the U.S. trucking industry.

Gov. Abbott declares diesel disaster

What Is Dyed Diesel, and What Changes Now?

Dyed diesel is diesel fuel marked with a red dye that is normally used for off-road purposes, including agricultural machinery and certain types of construction equipment.

One of the main differences is taxation. Because it is intended for off-road use, dyed diesel is generally sold without the fuel taxes imposed on diesel used on public highways. That is precisely why using it in vehicles traveling on public roads is normally restricted and can result in penalties.

The Texas proclamation temporarily suspends state restrictions and associated penalties, allowing dyed diesel to be used on state roads.

But there is an important distinction carriers need to keep in mind: allowing dyed diesel to be used on public roads does not mean Texas has eliminated the tax owed on fuel used for highway purposes.

The governor’s office makes clear that the proclamation suspends the state restrictions and penalties that would normally prevent the fuel from being used on public roads, but does not eliminate the underlying tax obligation.

In other words, an owner-operator or fleet should not interpret the measure as permission to simply fill up with tax-free fuel and drive without any additional tax obligations.

Up to 95,000 Pounds for Certain Loads

Fuel is not the only change that could have a direct impact on trucking.

The proclamation also suspends certain state permitting requirements for oversize and overweight vehicles transporting fuel, agricultural products or timber.

While the measure remains in effect, those vehicles may operate at a gross vehicle weight of up to 95,000 pounds.

That does not mean Texas has raised the weight limit to 95,000 pounds for every truck or every type of freight. The exception applies specifically to the vehicles and commodities covered by the proclamation.

For fuel haulers and certain agricultural and forestry operations, however, the temporary change allows more product to be moved per trip while the emergency remains in effect.

Before operating above normal weight limits, carriers should make sure that both the vehicle and the load qualify under the exemptions established by the state.

Texas Also Requested a Federal Waiver

Another part of the strategy still depends on the federal government.

Abbott asked the Environmental Protection Agency (EPA) for a temporary waiver of certain federal requirements involving ultra-low sulfur diesel (ULSD).

He also requested flexibility from Texas Low Emission Diesel (TxLED) requirements, which regulate certain characteristics of diesel sold in 110 counties across the state.

The goal is to expand available fuel supplies and allow more diesel to reach the Texas market at a time of high prices and pressure on supply.

However, this part of the strategy needs to be distinguished from the state authorization allowing dyed diesel to be used on Texas roads.

Texas can suspend certain rules under its own jurisdiction, but it cannot unilaterally eliminate federal requirements. The proclamation states that the suspension of TxLED requirements will apply to the extent authorized by the EPA.

Truckers therefore should not assume that federal ULSD requirements were automatically suspended as a result of Abbott’s action.

The EPA maintains a dedicated fuel waivers page where it publishes temporary waivers issued in response to supply disruptions or emergencies.

What Truckers Need to Know

For an owner-operator or fleet working in Texas, the most immediate change is the ability to use dyed diesel on state roads during the emergency without facing the state restrictions and penalties that would normally apply.

But that does not mean every obligation associated with the fuel has disappeared.

The proclamation does not eliminate the applicable tax obligation, nor can it independently suspend federal requirements. Carriers therefore need to distinguish between the exemptions Texas has already put into effect and those that still require action from Washington.

The same applies to the 95,000-pound weight allowance. This is not a new general weight limit for commercial trucks in Texas, but an exception covering certain loads of fuel, agricultural products and timber.

The decision comes as filling a truck’s tanks costs dramatically more than it did just a year ago. According to AAA, diesel averaged $5.86 per gallon in Texas on September 28, compared with $3.17 a year earlier.

For an industry that burns hundreds or thousands of gallons and covers long distances every month, that difference can quickly drive up the cost of every trip.

Truckers and fleets should review the terms of the Texas proclamation before using dyed diesel or taking advantage of the weight exemptions, and follow EPA updates regarding the federal waivers requested by the state.

The new rules give carriers more flexibility to operate amid the fuel crisis, but they do not mean that every weight limit, tax and regulatory requirement has been suspended.