(Valley News Live) — Gov. Kelly Armstrong declared a state of emergency Tuesday over the supply and availability of diesel fuel, taking action intended to provide temporary relief for North Dakota farmers during harvest season.
The executive order temporarily expands the allowed uses of red-dyed diesel fuel, which is taxed at a lower rate than regular diesel but is normally restricted to certain off-highway agricultural, industrial and railroad uses.
Why it matters for the tax rate
Under North Dakota law, regular diesel fuel carries a state excise tax of 23 cents per gallon, while red-dyed diesel is taxed at 4 cents per gallon. Armstrong’s order allows licensed motor vehicles used in agricultural operations to use the cheaper, dyed diesel not just for fieldwork but also for on-highway uses, including hauling grain, livestock, feed, seed, fertilizer, equipment and other agricultural inputs and products, as well as storing and processing agricultural products.
The order does not affect the federal government’s separate 24.4-cent-per-gallon excise tax on diesel fuel.
What officials are saying
“Record high diesel prices are squeezing our ag producers, and this is a meaningful and timely step we can take to provide temporary relief and help our farmers and ranchers through the harvest season,” Armstrong said, noting he worked closely with state Agriculture Commissioner Doug Goehring on the action.
Goehring said the change could meaningfully cut costs during the season when farmers use the most fuel.
“Farmers burn more diesel during harvest than at any other time of year, and saving 19 cents per gallon can make a meaningful difference when margins are razor thin,” Goehring said. “This translates into lower transportation costs to suppliers and processors, which hopefully will be passed on to the consumer. I remain committed to working with the governor and the ag community to identify ways to provide additional relief for producers during this time of high input costs and low commodity prices.”
The order took effect immediately Tuesday and will remain in effect through Nov. 30.
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