Record diesel prices reaching $6.03 per gallon in the state are squeezing Oklahoma farmers and ranchers during fall harvest, driving local and state leaders to push for urgent cost relief alongside a major international move by the world’s wealthiest nations to release 100 million barrels of emergency fuel. The reserve release follows warnings from President Donald Trump regarding possible restrictions on U.S. fuel exports, while at home, Oklahoma Governor Kevin Stitt is stepping in to shield producers from state enforcement on lower-cost agricultural diesel.
At the state level, Governor Stitt recently directed state agencies—including the Oklahoma Tax Commission and the Department of Public Safety—to implement a 120-day pause on the enforcement of state taxes, regulations, and fines tied to agricultural producers using red-dyed diesel on public highways. Typically restricted to off-road equipment, red-dyed diesel carries tax exemptions that offer significant savings over clear highway diesel. Stitt also instructed the Oklahoma Tax Commission to formally petition the Internal Revenue Service (IRS) for penalty relief, seeking federal cooperation so producers can transport livestock and harvest crops on public roads without facing federal excise penalties during the crunch.
On the international front, G7 nations agreed to open emergency reserves over the next four months after President Trump pressured European allies, particularly Germany and France, to tap their own stockpiles to stabilize fuel supplies rather than relying on American exports. While the White House initially weighed a ban on domestic diesel exports, Trump voiced second thoughts to reporters, noting that an export restriction could impact domestic automobile gasoline supplies while confirming internal discussions around fuel controls are ongoing.
The Washington Post reported that the G7 agreement prioritizes diesel first, followed by gasoline and crude oil. Market analysts, however, continue to question whether the agreement provides new volume or simply absorbs previously planned reserve draws.
Broader supply disruptions have fueled inflation across the board, with AAA noting gasoline prices have climbed over 40 percent in the past year amid ongoing conflict involving Iran and Ukraine. The diesel price spike has prompted calls for intervention from longtime free-market proponents, including Iowa Senator Chuck Grassley, who cited Richard Nixon’s 55-year-old soybean export embargo as precedent for executive consumer protection. Grassley argued that major oil companies should lower prices on domestic diesel, reinforcing calls from farm groups for state and federal relief to keep producers operating during a pivotal harvest season.
U.S. Secretary of Agriculture Brooke Rollins issued a statement on President Trump’s new executive order to provide relief for our farmers and ranchers by lifting taxes on dyed-diesel. Today’s action expected to represent approximately $640 million in combined federal and state savings across about 224.6 million harvested acres.
“President Trump is the most pro ranching and farming president in our lifetime. Energy dominance is at the core of putting farmers and ranchers first. This administration has unleashed American energy dominance, and we are now the largest energy producer in the world as a result. While the Administration has structurally changed the energy sector to secure the long-term future of agriculture, we are now taking steps to deal with short term pressures impacting our American farmers. Thank you, President Trump for signing today’s Executive Order enacting enforcement discretion on on-road use of dyed diesel, which will better enable our farmers to deliver America’s harvest during this critical time. And I want to thank Vice President Vance for his help shepherding it to the end.”
Farmers already receive a federal tax exemption on dyed diesel used off-road. The new order expands that relief by temporarily allowing dyed diesel to be used on highways without the usual federal tax enforcement and penalties.
