Texas declares state of emergency over diesel shortage — Global News Canada
The U.S. state of Texas has declared a state of emergency due to a diesel fuel shortage. The decision allows for the temporary easing of a number of regulatory restrictions, including those concerning the use of so-called dyed diesel, Global News reports.
The governor of Texas said that the diesel shortage poses a threat to public safety and could negatively affect agriculture and livestock farming. According to him, it increases costs for farmers, limits investment in equipment, and raises costs in supply chains. Carriers and construction companies are also facing higher costs.
Easing of rules
State authorities have temporarily allowed broader use of dyed diesel — reddish fuel intended primarily for off-road equipment in the agricultural and construction sectors. Such fuel is not subject to motor fuel tax. The easing of restrictions allows businesses to use off-road diesel reserves for commercial road transport and reduce tax costs amid high prices.
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In addition, vehicles carrying fuel, agricultural or forestry products weighing up to 95,000 pounds will be able to transport cargo without additional state permits for oversized or overweight vehicles. The governor also asked the U.S. Environmental Protection Agency to ease certain diesel fuel requirements in order to expand opportunities for its sale in Texas.
Pressure on the fuel market
Amid declining global oil supplies and rising prices, U.S. President Donald Trump threatened to ban exports of American diesel. According to the outlet, supplies are under pressure due to repeated closures of the Strait of Hormuz as a result of the U.S. war with Iran.
TD Economics economist Mark Ercolao noted that such measures may provide local short-term relief for businesses and consumers, but could also affect other segments of the fuel market. He stressed the need to assess the possible side economic consequences of regulatory easing.
