If Hurricane Katrina�s devastation was ever underestimated, so was the slippery fuel mess that the storm created for construction truckers.
The Internal Revenue Service is allowing truck owners all over the U.S. to use red-dyed diesel fuel without tax penalties through Sept. 15. The IRS announcement, made on Sept. 2, is "in response to shortages of clear diesel fuel caused by Hurricane Katrina," the agency says.
In a joint effort days before, the Environmental Protection Agency lifted its ban on dyed diesel in highway trucks. Refiners can put dyed diesel into the fuel chain only after clear, low-sulfur diesel stocks "have been depleted," according to EPA.
It may sound like a diesel holiday for everyone, but the waivers do not allow truckers to dip into existing supplies of dyed diesel, industry experts say.
Equipment owners can fill trucks with dyed fuel as long as they can prove that they paid taxes for it. Truckers using dyed fuel for which no taxes were paid are subject to penalties, according to IRS. State and local rules may apply as well.
The waivers are expected to ease tightening U.S. oil supplies. Several refineries in the path of Katrina remain off-line, according to Bill Bush, spokesman for the American Petroleum Institute, Washington, D.C.
Government contractors are quickly pushing trucks, SUVs, heavy machinery and personnel into the Gulf Coast region for damage assessment work. Lifting the federal fuel requirements "helps us mobilize at the rapid pace being asked of us," says Gary Bernardez, president of Fluor Corp.�s equipment division, AMECO, based in Greenville, S.C.
Elsewhere, construction equipment owners say they will avoid using dyed fuel in their highway-bound vehicles, if possible. "If I started using dyed fuel, I�d never get rid of the residue in the tank," says Pete Spear, fleet administrator for James McHugh Construction Co., Chicago.
The federal government normally requires truckers to fill up with highway diesel, which has a sulfur cap of 500 ppm. Off-road diesel, which is less expensive and has a much higher sulfur content, contains a red dye for ease of inspection. Unlike highway diesel, off-highway grades are not subject to fuel taxes.
|Katrina May Clean Out Construction Suppliers, September 2, 2005|