USDA secretary urges states to allow on-road dyed diesel

U.S. Secretary of Agriculture Brooke Rollins said Tuesday in Iowa that she is urging state governors to follow the president’s move to suspend penalties on the unrestricted use of dyed diesel, a tax-exempt fuel typically allowed in off-road machinery only. 

President Donald Trump announced Monday evening at a rally in Nebraska he would authorize highway use of dyed diesel fuel and defer the federal excise tax on the fuel to provide relief from the steep diesel prices which have hit record highs of more than $6 per gallon, nationally. 

The move from Trump followed actions from several states, like Ohio, to suspend state fuel taxes or to allow dyed diesel fuel. After Trump’s Monday-night executive order, more states, including Iowa, have leveraged similar state-level suspensions. 

Rollins, speaking with reporters at a stop in Iowa Tuesday, said she is “on the phone constantly with other governors, trying to get them to do the same.” 

Rollins said 13 governors, including Democratic Gov. Josh Stein in North Carolina, have followed suit. 

“I’m working on a lot of the other Democrat governors, saying … this will really help your constituents and your farmers.” 

According to the executive order from the president, the federal suspension could save drivers as much as $100 per trip to the fuel station. Corn growers from Iowa wrote to Iowa’s congressional delegation in September and asked them to push for federal waivers to use dyed diesel on the road, in addition to calls to stop diesel exports and to release oil from the national reserves. 

Iowa Corn Growers Association President Steve Kuiper said in a statement Tuesday the expanded use of dyed diesel will “help provide financial relief” to farmers “when they need it most during harvest.”

In his announcement Monday evening, Trump said the order would allow “anyone” to purchase red-dyed diesel fuel “for any reason.” Trump’s executive order runs through the end of the calendar year. 

Iowa Gov. Kim Reynolds’ proclamation Tuesday temporarily suspended penalties on dyed diesel that is used in on-road vehicles hauling agricultural products, like corn, soybeans, hay and fertilizers. The Iowa proclamation runs through Feb. 2, 2027.

“This will lower costs for farmers through the harvest and beyond by opening access to tax-free fuel,” Reynolds said in a statement.

Rollins said Tuesday that in addition to the executive order on dyed diesel, an influx of 100 million barrels of oil from the Group of Seven, or G7, countries have “already” caused the price of diesel to decline. The G7 announcement was made Friday. According to AAA fuel price data, the national average price of diesel was about $0.13 per gallon lower Tuesday than a week prior. 

“There’s a lot of really good things that are being deployed right now,” Rollins said. 

Fuel prices have risen sharply due to the ongoing war in Iran and closures in the Strait of Hormuz, a prominent trade route for products like oil and fertilizer, combined with continued conflict between Russia and Ukraine. 

In his rally speech in Nebraska, Trump said the situation in Iran is “going to be over with very soon.” Rollins echoed the sentiment Tuesday when asked about the war and said the government of Iran “cannot have” a nuclear weapon and that the war was “so important for the future.”

“He has said that we’re moving quickly, that we will and should be out of it very soon,” Rollins said. “When that happens, all of the fuel prices, everything will absolutely go down significantly.” 

Rollins said the current situation “is exactly why” the administration is “working so hard” to increase domestic energy production. 

Rollins, who spoke alongside Iowa Congressman Zach Nunn at an event in Des Moines, said onshoring fuel production doesn’t just mean oil, but also investing in biofuel production.

Rollins said Nunn and the rest of Iowa’s congressional delegation are “the reason” the current administration is considered the most “pro-biofuels administration in history.” Iowa’s delegation have joined other agriculture heavy states in pushing for action on things like access to year-round, nationwide E-15, which advocates say would help farmers and lower prices at the fuel pump. 

U.S. Rep. Mariannette Miller-Meeks, another Republican from Iowa, also joined Rollins earlier in the day at a Jasper County farm for an announcement about the U.S. Department of Agriculture’s seed sovereignty program. Miller-Meeks cheered the House-passed bill for E-15 and said the country just needs “that pesky Senate to act.” 

Nunn and Miller-Meeks also spoke about the importance of finalizing 45Z rules, a tax credit for domestically produced biofuel, including sustainable aviation fuel, in bringing down fuel prices. 

Rollins’ visit to Iowa, Trump’s announcement on diesel and individual state actions to lower fuel prices coincides with a competitive upcoming midterm election in which Republicans hope to maintain the majority. Nunn and Miller-Meeks are both seeking reelection and face competitive races in Iowa.