Maryland farmers and loggers can now use red-dyed diesel in their on-road trucks for the first time, saving 71.85 cents per gallon in combined state and federal taxes. This shift follows an executive order from Governor Wes Moore aimed at easing the financial burden on the state's agricultural sector amid rising fuel costs. Similarly, Michigan Governor Gretchen Whitmer signed an executive order on Monday to waive penalties for vehicles with farm or wood harvester plates that use the untaxed fuel on state highways. Both states declared a state of emergency to implement these relief measures, which are effective through December 31.
The policy change addresses severe financial pressure caused by surging energy prices. In Michigan, the average price of diesel hit $6.49 per gallon on Monday, a sharp increase from $3.66 per gallon one year ago. By allowing the use of off-road diesel—which is chemically identical to standard fuel but exempt from highway excise taxes—the governors aim to reduce the operating costs that currently strain the agricultural and forestry economies.
While the federal government under President Donald Trump has also suspended penalties for using dyed diesel on highways, Maryland officials advise caution. Harrison Palmer of the Maryland Department of Agriculture noted that because neighboring states have not yet adopted similar policies, drivers should avoid using the dyed fuel in vehicles crossing state borders. Maryland's order additionally suspends fees for exceptional hauling permits, allowing for heavier loads on state highways to further assist industry productivity during the emergency period.
The administrative change marks an unprecedented departure from standard tax enforcement. The red dye typically serves as a regulatory marker, designating fuel exclusively for tractors and construction machinery. Both states confirmed that these measures are temporary responses to the current national energy crisis and will remain in effect until the end of the calendar year.