More Red Dye

Thursday, October 8th, 2026

Bill Bonner, from Ardmore, Ireland

‘It’s all a circus.’

—Tom Kloza, chief energy advisor, Gulf Oil

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Diesel fuel costs about $9 a gallon, here in Ireland. In the US, it’s only $6.30.

But in the news is a whole new category of public policy — solutions that don’t work to problems you shouldn’t have. Call it the ‘Red Dye’ cure.

Diesel fuel is the blood of commerce. It keeps the trucks running and the shelves stocked. And with the mid-term elections only a month away, the party in power is desperate for a transfusion.

To that end, it has drained the US oil reserve. ABC News:

US oil reserve hits 44-year-low amid Iran war, global energy shortage

And urged Europe to do the same. CNN:

Europe bows to US pressure to release diesel reserves ahead of midterm elections

And then, Mr. Trump found what looked like another donor. Fox News:

Trump opens red-dyed diesel to truckers in bid to slash fuel costs

The order also directs officials to protect farmers’ access to red-dyed diesel and encourages states to adopt matching relief.

This will save truckers ‘more than a hundred dollars’ each time they fill up, says Trump. And it will save farmers ‘millions of dollars.’

But the decree adds not a single gallon of diesel fuel to the nation’s slosh. And, when the accounts are fully settled, not a single penny will be saved by anyone.

First, the Executive Order doesn’t eliminate the tax, it only defers the tax on the ‘red’ diesel. And it only defers enough to get the price down to, maybe, $6 a gallon.

Second, the taxes on diesel are ‘road use’ taxes. If the truckers don’t pay to maintain the asphalt, someone else must.

Third, farmers don’t pay the ‘road use’ taxes because their tractors don’t use the roads. Divert the red diesel to the highway truckers’ Peterbilts, and what are the farmers supposed to put in John Deeres?

The red diesel trick is the latest tool in the feds’ box. The obvious cause of high diesel prices is the war against Iran. The US attacked Iran to solve a problem it didn’t have. Now, it has a problem. And the obvious solution is to stop attacking Iran. Cut our losses and move on to the next debacle.

Instead, the losses multiply. The Independent:

16 American trucking companies file for bankruptcy as diesel costs soar

Rising costs in areas such as insurance and maintenance are pushing some trucking companies to the brink.

It may not be a good time to ‘keep on truckin.’ Driving a big rig is not easy. We’re always amazed when we see them effortlessly back into a space that even a Volkswagen would have had doubts about.

It takes time and skill to do that. Who wants to invest the time to develop a skill that everyone says will soon be made redundant by AI-brained, self-driving trucks? And then pay $1,000 to fill up? The New York Times:

Truckers Are ‘Just Trying to Hang On’ When a Fill-Up Tops $1,000

And what about the farmers? Newsweek:

Farmers Slam Trump Over Record Diesel Prices: ‘We Just Can’t Survive’

NPR:

American farmers are hurting — and worried about their futures

Fertilizer prices are up 15% this year compared to last, and the price of diesel fuel has jumped by 80%, making it hard for farmers to turn a profit.

Like truckers, America’s farmers have problems they oughtn’t have. Even before the diesel problem came along, Trump’s tariffs reduced US farm exports and the farmers’ revenues. That was an easy problem to solve too. Trump’s tariffs had caused it. They could be removed with the stroke of the pen.

Instead, he red dyed it, giving farmers taxpayer-financed handouts. BBC:

Trump unveils $12bn farm aid package to help farmers who faced ‘unjustified trade actions’

There’s a real solution. And a red dye solution. Expect more red dye.

Regards,

Bill Bonner

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