Arkansas – Arkansas Gov. Sarah Huckabee Sanders has extended an emergency order allowing certain farmers and loggers to use tax-free, red-dyed diesel fuel in eligible highway vehicles through the end of 2026, providing additional relief as fuel prices remain elevated.
Sanders announced the extension on Oct. 30, saying Arkansas farmers and loggers work hard to keep the country running and that the order would help keep fuel costs down and the state moving forward.
Executive Order 26-16 amends an earlier order issued Sept. 29 and extends the temporary suspension of certain motor-fuel penalties from Oct. 31 through Dec. 31, 2026.
Under the order, eligible agricultural and timber operations can use dyed diesel fuel in certain vehicles without facing the usual state penalties. The suspension applies to Class 2, 3, 4, 5, 6 and 8 motor vehicles, as well as vehicles registered in Arkansas that are not licensed under the International Fuel Tax Agreement.
Normally, Arkansas law restricts the use of dyed diesel in highway vehicles because the fuel is sold at a lower tax rate for off-road purposes. Violations can result in additional taxes and penalties, including a $10-per-gallon penalty calculated based on the vehicle’s fuel tank capacity. The executive order temporarily suspends specified penalties for qualifying use during the emergency period.
Sanders cited the rising cost of diesel fuel as the reason for extending the relief. According to the order, the average retail price of diesel in Arkansas had reached $5.90 per gallon, significantly higher than the $2.46-per-gallon price used in the University of Arkansas Cooperative Extension Service’s 2026 crop enterprise budgets.
The order also points to continued pressure on fuel supplies, noting that U.S. distillate inventories were 13% below the five-year seasonal average as of Sept. 11, according to the U.S. Energy Information Administration.
Agriculture is Arkansas’ largest industry, contributing more than $25.6 billion annually to the state’s economy and supporting more than 248,000 jobs, according to figures cited in the executive order. The state has approximately 37,200 farms and ranches covering 13.6 million acres, while forestland spans about 18.8 million acres.
The extension comes as Arkansas farmers continue harvesting crops, with some operations extending into November, while the state’s timber industry operates year-round.
The order also follows President Donald Trump’s Oct. 5 executive order temporarily suspending federal penalties and enforcement actions for certain uses of red-dyed diesel through Dec. 31, 2026.
Sanders’ extension does not remove all restrictions on dyed diesel use. It temporarily suspends specific state penalties for qualifying vehicles and operations during the declared emergency period, with the relief scheduled to expire on Dec. 31 unless further amended or extended.