‘Minimal relief’: Trucking groups pan Trump’s diesel executive order

Por James Bikales — POLITICO – TOP Stories

The nation’s largest trucking groups said Tuesday that President Donald Trump’s executive order aimed at easing diesel prices would do little to increase availability of the key transportation fuel.

The statements from groups representing both major trucking companies and independent truckers — typically close Trump allies — cast doubt on the president’s claims Monday that the move would save truckers hundreds of dollars and help bring down the cost of goods across the economy. The high cost of diesel — averaging $6.31 a gallon, or about $2.64 higher than last year — is dragging on Republicans going into next month’s elections.

Trump signed the order — aimed at expanding access to tax-exempt dyed diesel typically limited to off-road use — during a campaign stop Monday in Nebraska, where farmers and truckers have particularly felt the pinch of record diesel prices. The order directs the Treasury Department to within five days defer payment of the federal excise tax connected to on-road use of dyed diesel fuel without interest or penalties through the end of the year.

The order drew some praise mostly from agriculture-state lawmakers and a few farm groups, even though farmers largely already had access to dyed diesel.

But expanding dyed diesel use “does not create additional fuel or address the underlying supply crunch that is driving prices higher,” Henry Hanscom, chief advocacy and public affairs officer at the American Trucking Associations, said in a statement Tuesday.

“Our priority is meaningful, reliable relief that lowers operating costs without creating new compliance burdens or undermining the roads and bridges our industry depends on,” Hanscom said.

Hanscom noted that the “practical details here matter,” saying the group would need to review IRS’ forthcoming guidance to “better understand how this relief will work in practice.”

“Carriers need clear federal and state guidance on eligibility, reporting, and any taxes that remain payable,” he said.

The White House referred questions to its press release on the order. The Treasury Department did not respond to questions.

Todd Spencer, president and CEO of the Owner-Operator Independent Drivers Association, echoed that “allowing the wider use of red-dyed diesel will provide minimal relief.”

“Every $1 increase per gallon in fuel costs our members around $400 more per week, and sustained high prices will put many truck drivers out of business,” Spencer said. “Market stability is essential to bring down costs for the long haul.”

Analysts ClearView Energy Partners said in a note Tuesday that the order relies on retailers being willing to sell dyed diesel without collecting taxes, despite uncertainty about whether — and how — those taxes would need to be collected later.

“Until specifics are spelled out, we think retailers may be reluctant to knowingly sell dyed fuel for highway use without collecting federal taxes,” ClearView said.

Trump’s order also directs Treasury to “explore avenues, including legislation” to permanently waive the deferred taxes. But ClearView said the chances of such a measure passing Congress during the lame duck are unlikely and will “diminish considerably” if Democrats flip either chamber in November.

Patrick De Haan, head of petroleum analysis for fuel price tracking website GasBuddy, said in a social media post that most trucking companies are not likely to take advantage of the order, especially since the majority of states have not waived their own restrictions on dyed diesel.

“A national carrier crossing five or six states in a day faces enormous risk with a patchwork of rules, legal in one state, and subject to fines in the next,” De Haan said. “Add uncertainty over the tax being deferred, and few compliance departments will risk the 24-cent savings on $6 diesel.”

Fonte: POLITICO – TOP Stories