The October 5 executive order signed by President Trump allows on-road use of off-road “red dye” diesel through the end of 2026, enabling fleets to save 24.4 cents per gallon by not having to pay the federal excise tax that’s attached to regular diesel. The IRS also announced the agency would not impose penalties on the sales and use of red-dye diesel, retroactive to Oct. 1 and through Dec. 31. During the relief period, federal inspections of on-road red-dye usage are also suspended.

While every little bit helps at this point in time, some fleets might be wondering if the price savings are worth the potential risk of switching fuels.

There are a few key things to consider when making that decision.

Will using red dye diesel lead to meaningful savings?

Given the massive increase in the price of diesel this year, fleets are paying at least $2.50 more per gallon than they were a year ago. In other words, switching to red dye diesel will help them recover 10% of that, at best.

What does that mean for an OTR truck accumulating 25,000 miles over the course of three months? Assuming it gets 10 mpg, that vehicle will consume 2,500 gallons. That’s an additional fuel cost of $6,250 compared to a year ago. By using red dye diesel and saving 24.4 cents per gallon, the fleet will reduce that additional cost by $610. The fleet is still eating $5,640 over a three-month period.

But again, every little bit helps. And if states follow suit by waiving their own excise taxes, a fleet’s savings could be greater.

“Switching to red dye diesel is a business decision every fleet or owner-operator needs to make for themselves based on where they are and their own situation,” said Tommy Slaymaker, director of fleet services at The Pete Store, a Peterbilt dealer group with 32 locations across the East Coast.

Will red dye diesel cause performance issues or void my warranty?

Slaymaker has been receiving a lot of inquiries from fleets about this. His short answer is no.

“Virtually all red dye diesel that’s produced in the U.S. follows the same ASTM D975 standard as regular on-highway diesel fuel and has the same sulfur level,” Slaymaker pointed out. “Using it won’t void a warranty. Fleets shouldn’t have to worry about running into injector or aftertreatment system issues either, and fuel economy shouldn’t change.”

But that’s assuming the red dye diesel a fleet starts using is a high-quality fuel.

“Be careful about using old red dye diesel,” Slaymaker said. “Try to determine if the fuel is being taken care of properly so you don’t have to worry about any algae or water in it. Just be conscious of where you’re getting it from.”

When Fleet Maintenance asked Cummins, they responded: 

We continue to recommend that customers follow the fuel specifications outlined for their engines and equipment and they can do so through QuickServe Online. Regarding dyed diesel, there would not be a warrantable impact based specifically on use of taxed vs. untaxed fuel.

If a fleet uses on-site fuel it buys from a fuel supplier, it can ask the supplier how long their red dye diesel sits before being distributed, if it’s tested, etc. A fleet could also do its own fuel testing.

A fleet could test its fuel when buying at the pump too. Additionally, Slaymaker said a simple litmus test is to evaluate the quality of the fuel retailer. That’s important because it’s pretty unlikely a fleet will find red dye diesel at the big truck stops.

What else can fleets do to absorb rising costs?

The spike in diesel prices, on top of all the other inflationary pressures of the past four years, has obviously been a major blow to fleets.

“There is only so much our fleet partners can absorb,” Slaymaker said. “Our customers are telling us they are working with fuel vendors to see if there is better pricing available. They’re working with customers to make sure their contracts are set right. But it’s getting to a point where there is no money left on the table to absorb.”

So what do fleets do? Slaymaker has been talking with his customers about the following.

Fuel-saving truck features. Slaymaker said he hasn’t seen any fleets come sprinting into a dealership looking to buy a BEV. But they are looking into a handful of optional truck and trailer accessories that could help improve fuel economy and reduce overall fuel consumption.

Aerodynamic accessories like front air dams, wings, and side skirts are capturing interest. Some fleets are looking into insulation packages. Auxiliary power units (APUs) are getting really hot, and Slaymaker said an important trend has emerged.

“We’ve had a massive uptick in smart air applications for our OTR customers,” Slaymaker related. “We’re seeing more fleets move away from a diesel-powered APU to more of a battery-driven system. We’re seeing a shift toward an electric APU paired with a diesel-fired bunk heater.”

Idle time. “We’re seeing that fleets are really looking to crack down on idle time, especially vocational fleets that are running PTOs on their trucks,” Slaymaker said. Yes, plenty of technology exists that can help in this area, such as engine shutdown and telematics. But Slaymaker said driver training can be just as impactful — and that goes for other driver behaviors that can impact fuel economy as well.

Optimizing maintenance. Slaymaker said more fleets are increasingly curious about extending certain PMs to reduce costs. “One thing I’m happy about is that I’m not seeing much desire to put off needed repairs,” Slaymaker said. “That’s a good thing because doing so always catches up with a fleet later.”

To the contrary, Slaymaker said more fleets are looking to make better use of technology to shift to more of a predictive and proactive maintenance posture. That can help get ahead of looming repairs, which helps control downtime and cost.

Leveraging buying power. With the shift to more of a predictive maintenance posture comes the ability to better leverage buying power. You don’t have to be a really big fleet to make this work in your favor either.

“Most 15- to 25-truck fleets are playing firefighter when it comes to maintenance and repair,” Slaymaker said. “We’ll sit down with a fleet manager and ask something like, ‘How many 3600AX brake drums did you buy last year?’ Most don’t know because they aren’t tracking anything.”

When a fleet is tracking and predicting, it can try to take advantage of volume discounts early in the year. The fleet could also go a step further.

“Maybe the fleet manager determines that they’re going to need 50 brake drums in the next year,” Slaymaker said. “Maybe the fleet manager can talk with the dealership or independent shop they work with about going in on a pallet of brake drums together. The same thing could be done with batteries and other common replacement parts.”

In a situation like that, the financial benefits are there for both the fleet and its service partner. That’s important in the current environment fleets and shops are both trying to navigate.

“Know who your true partners are,” Slaymaker advised. “These are hard times, but we can get through them better when working together.”