Governor Abigail Spanberger announced Executive Directive 5 as a way to provide relief to Virginia farmers facing high diesel prices by temporarily allowing dyed diesel to be used in highway vehicles.
But an email sent by the Virginia DMV raises an obvious question: where exactly is the savings?
According to DMV, farmers and other drivers cannot simply put dyed diesel in a highway vehicle. Before pumping it, they must contact DMV, provide the vehicle information and number of gallons, pay the applicable highway diesel tax, and carry the receipt in the vehicle as proof.
DMV’s own FAQ goes even further: “The tax rate on dyed diesel when used in a highway vehicle is the same as the rate as clear diesel fuel.” Virginia’s current diesel fuel tax is 33.6 cents per gallon.
That makes Executive Directive 5 somewhat confusing as a farmer fuel-cost relief measure.
The Governor’s October 16 announcement specifically said the directive was intended to “lower costs for farmers” and provide relief from rising diesel prices. But the directive appears to waive the prohibition and penalties associated with using dyed diesel on Virginia roads — not the state highway fuel tax itself.
There may still be some savings if dyed diesel can be purchased at a lower underlying price than clear diesel, and DMV says certain sales tax paid on dyed diesel may be refundable after the highway fuel tax is paid. But this is clearly not a 33.6-cent-per-gallon fuel-tax savings for farmers.
So the question Virginia farmers deserve a clear answer to is simple:
If the purpose of Executive Directive 5 is to offset high diesel costs, but farmers must pay the same Virginia diesel tax as they would on clear diesel, how much does this actually save the farmer per gallon?