Stitt urges relaxed dyed diesel regulations

Dale Denwalt

The Oklahoman

USA TODAY NETWORK

Hours after Texas Gov. Greg Abbott declared an emergency to authorize the use of tax-exempt dyed diesel on public roads, Oklahoma Gov. Kevin Stitt issued his own response to record-high diesel prices that spiked after the United States attacked Iran.

Stitt’s response, however, was not an executive order. Instead, he wrote a letter to three state agencies asking them to relax their own regulations and request help from the federal government. One of those agencies told The Oklahoman they have no authority to do what Stitt asked.

In his letter sent Monday, Sept. 28, Stitt wrote to the heads of the Oklahoma Tax Commission, Department of Public Safety and to the chair of the Oklahoma Corporation Commission.

'(For) the next 120 days, I am requesting the Oklahoma Tax Commission, the Oklahoma Department of Public Safety, and the Oklahoma Corporation Commission take corresponding action within its jurisdiction to temporarily adjust enforcement priorities concerning the use of dyed diesel fuel by Oklahoma farmers, ranchers, and agricultural producers,' Stitt wrote.

In other words, it seems that Stitt is asking state agencies to deprioritize the enforcement of state and federal dyed diesel rules.

What is dyed diesel?

Diesel prices have spiked during a time when agricultural producers across the state have begun their harvest. Diesel fuel, not gasoline, is widely used in vehicles that transport crops and livestock.

Dyed diesel, which is legally restricted for use only in farm vehicles and equipment, is regulated and taxed differently than regular diesel fuel. It includes a dye to alert regulators when someone is illegally using it for a road vehicle.

Violators can be jailed and fined if dyed diesel is found in their fuel tank. That is, unless the Department of Public Safety waives enforcement. That’s exactly what Stitt asked for. In his letter, Stitt asked DPS, which includes the Oklahoma Highway Patrol, to 'refrain from initiating inspections, citations or other enforcement actions based solely on the presence or use of dyed diesel fuel' in vehicles traveling on the highway.

He also made the same request to the Oklahoma Corporation Commission. An OCC spokeswoman, however, told The Oklahoman that OCC has no jurisdiction or authority over the use of dyed diesel on the roadway, so there would be nothing for the commission to actually refrain from doing.

OCC’s Petroleum Storage Tank Division will continue to inspect facilities where dyed diesel is sold, the agency said. If inspectors suspect that dyed diesel is being sold for highway use, OCC would refer those suspicions to the Internal Revenue Service like normal.

The Oklahoman has asked OTC and DPS for clarification on how they will respond to Stitt’s request, but those agencies have not yet responded.

Federal government considers relaxing diesel rules

On Monday, Reuters reported that the White House was considering expanding the allowed uses of dyed diesel in an attempt to control fuel prices amid the near-shutdown of Middle East oil shipping lanes during the U.S.-Iran war. When it comes to fuel prices, President Donald Trump has focused blame on Ukraine’s campaign against Russian oil refineries, but the price spike only occurred after the U.S. and Israel launched a bombing campaign against Iran in February.

While the federal diesel tax is 24.4 cents per gallon, dyed diesel is only subject to a one-cent tax per gallon.

Fuel isn’t the only cost shocking the wallets of Oklahoma farmers. The shutdown of the Strait of Hormuz due to the Iran war has also caused a spike in fertilizer prices, Oklahoma Farm Bureau president Stacy Simunek recently wrote in an op-ed. All of this is happening during an extreme drought across the state.

'Oklahoma agriculture is currently in uncharted territory. Yes, we have seen input prices rise in the past, we have gone through times of depressed commodity prices and we are used to challenging weather. But when all those factors all hit at the same time this summer, we experienced not a flash drought but a flash farm crisis,' Simunek wrote.

Dyed diesel is legally restricted for use only in farm vehicles and equipment.

JJ Gouin, Getty Images/iStockphoto