As global oil supplies continue to tighten and fuel prices soar, the governor of Texas declared a state of emergency over a shortage of diesel fuel.
Declaring a state of emergency can unlock a government’s ability to temporarily modify certain policies in order to protect the general public: in the case of Texas, this includes waiving restrictions on what’s known as dyed diesel.
Governor Greg Abbott of Texas issued an emergency notice on Monday.
“The shortage of diesel fuel poses an imminent threat or occurrence of harm to the public health and safety in the State of Texas,” the notice says.
“A shortage of diesel fuel will impose harmful effects upon the agriculture and ranching industries by increasing the price per acre to achieve similar yields, reducing investment in farm and ranch machinery, and driving up supply chain expenses.”
Abbott also states that truckers and construction companies are facing higher costs that are making it difficult to maintain operations or spend on new projects.
This also comes after U.S. President Donald Trump threatened to ban exports of U.S. diesel as supplies come under strain as a result of the repeated closure of the Strait of Hormuz from his war with Iran.
Opher Baron, a distinguished professor of operations management at the Rotman School of Management, says the U.S. is trying to maintain its presence as a superpower by using its leverage on energy wherever it can.
“If you look at some of the international actions of the U.S. regime over the last 12 months or so, they are very much focused on the energy market,” says Baron.
“Obviously, before the midterm elections coming up next month, there is pressure on this main goal.”
What's changing in Texas?
Abbott says his government is taking specific steps to suspend certain regulatory measures, including the use of dyed diesel fuel, weight limits on commercial shipping, and some standards for diesel emissions in order to provide financial relief amid a global diesel squeeze.
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Baron says these measures could provide some short-term relief for American consumers and businesses, but whether or not they are sustainable affordability solutions is unclear.
Dyed diesel is, literally, reddish in colour because of an additive used to identify it as fuel used mainly for off-road purposes, such as agriculture and construction, which does not require a motor-fuels tax.
Easing restrictions on the use of dyed diesel on the road allows for businesses to tap into their off-road fuel stocks for commercial road transport purposes and bypass retail fuel tax costs, where they would otherwise face record-high diesel prices.
The proclamation also states that vehicles loaded with fuel, agricultural or timber products weighing up to 95,000 pounds will not be required to carry additional state permits for being oversized or overweight.
Finally, the governor formally requested the Environmental Protection Agency to waive certain rules for diesel fuel that apply in Texas, which he says will remove some limits on which diesel can be sold, and he requested a waiver to allow more fuel to reach pumps in the state.
“What needs to be considered is, does this have any second round impacts on other parts of the economy? Because if you’re going to put a policy in place that provides relief in one place, but provides strain in another, then it’s worth questioning the effectiveness of that policy,” says economist Marc Ercolao at TD Economics.
“In this case of Texas, it very well may have local positive impacts in the diesel space. But should that have other impacts in other fuels, you might just end up at an offsetting point where it was neither a benefit nor a detriment.”
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Could similar measures work in Canada?
Canadian consumers and businesses are also grappling with higher gas and diesel prices, and the Bank of Canada has warned that the longer these oil and gas prices remain elevated, the more likely those higher prices will be reflected in other areas like food, housing, and just about everything else.
The federal government has extended a pause on the fuel excise tax until the end of January 2027, which brought immediate relief at the pumps for both regular and diesel fuels as well as jet fuels when it was introduced earlier this year. The tax will then return at a 50 per cent rate from Feb. 1 through March 31, 2027.
But diesel prices have been climbing faster than regular gasoline.
In Canada, the national average for diesel fuel is hovering around C$2.60 per litre, according to Natural Resources Canada, up from $2.35 last month, and about $1.54 a year ago.
The Canadian national average price for regular gas is about $1.75 per litre, according to the Canadian Automobile Association, up from $1.71 last month and $1.35 a year ago.
Conservative Leader Pierre Poilievre has proposed eliminating all tax on diesel sales until at least Canada Day by extending the full fuel excise tax cut until July 1 of next year and removing the GST from the purchase of fuel.
Ercolao says niche quick-fixes, like in Texas, may not be as necessary in Canada because of the country’s refining capacity, or ability to produce more diesel for consumption, and tax relief measures may be more effective.
“Most of the relief measures that we have seen here have been through taxes and domestic consumption, like being able to meet our domestic demand through our own production and refining,” says Ercolao.
“As far as the current tax relief goes, it’s definitely providing that relief at the pump, and for diesel as well. Those are net positive for consumers and businesses.”
– with a file from The Canadian Press
I just swallowed 1 lbs of c um! Beat that, MAGAS!
So many MAGA traitors are here taking a break from building the Orange guy monuments to read and comment on MSN news. Aren’t you minions banned from reading real news? Back to slave labor, losers. LOL!
@Herb
That about sums it up…lol
The title is what Ariel typed into his A.I. powered article writing app.
@J, “Peer Reviewed” is my third year professor using his own saliva to reshape his Burger King moustache and goatee while his over-funded colleagues sit around reading thesis papers and casually chitchatting about their upcoming plans for March Break.
It feels like we are 51 state, 90% articles about USA. Canadians need their daily dose of American’s struggles, it makes them feel better about themselves.. and instead of focusing on Carney our attention is redirected to blaming Trump for everything.
I really would love to know, while reading Canadian newspapers, what’s new in Canada.
We acknowledge that Canadian opinions are irrelevant on all things, but we still have to publish this as news.
Texas voted Republican and now reaps the benefits of their bad choices.
@Ben
What does “peer reviewed” mean in the 21st century? No such thing as independent research any longer. Many years ago there were a few independent labs….no longer.
@Bulldozer revolution. Respectfully, the story about Florida suing Pfizer is a non-story. It won’t succeed and is a waste of money. Peer reviewed studies, available on the NIH database, show the vaccine was extremely effective in saving lives, and the side effects therefrom affected a relatively small number of individuals.
No article on Florida suing Pfizer? Crickets on that story?
Too funny. Trump is totally responsible because of his reckless war.
Karma’s a bitc*
It is literally the same fuel from the same stock from the same refineries.
In most cases the fuel is in teh same storage tank at the filling station and the dye is injected right at the pump as it passes through.
In other words, this is a massive nothing burger.
Besides, there is no fuel shortage. Just another excuse to gouge consumers and permanently raise the prices of fuel across the board.
Funny how the USA is freaking out over $6 diesel yet Canada is paying $9.84 per US gallon and don’t complain. Canadians are such sheep.
All of this, Ukraine/Russia, Iran, Red Sea….all part of the plan…..but….what’s the end game?
None of this is coincidence…
The biggest problem is Opec. One entity controlling global price. Whatever is going on in the middle east or elsewhere should have no bearing on our prices in north America. We have the oil and refineries. Opec is just a big mob like business
Visiting Texas from Alberta what shortage ?
If there is a shortage I will be surprised. I work at Canada’s largest refinery and not only has there been no shortage, the plants have expanded and are being refurbished to accommodate the forecast for increased demand.
Ukraine destroying Russian refineries are as much to blame for deisel prices as the Iran war. Saudi pipeline attack is the icing on the tombstone.
Texas has an oil shortage? Did the US finally suck them dry? Bloody energy pigs. Gee we got lots. Problem is, its still in the ground and will be for a long long time if we cannot get rid of these Liberal pigs.
It is time to switch to electric vehicles.
I have herpes now.
This recent spike is because of Houthi attack on East/West pipeline in Saudi Arabia. Also Houthis have taken control of island at South end of Red Sea, essentially blocking all traffic.
Why is this allowed to continue?
If Trump didn’t start the Iran war, the US wouldn’t be in this situation.
Allow diesel earmarked for farm use to be used on the highways. Great… that means cheaper fuel However what is the farmer going to use? No thought at all. The US is still in harvest mode,so any fuel is slated to be used for this falls harvest. In Canada, the farmer has not invested in the spring planing fuel yet, so their tanks would be pretty dry. A farmer would not invest their money in fuel that they were not going to use for 5 months, unless it was really cheap, or they thought the prices would go up a lot further.
There is no stockpile of farm fuel at the distributors. It is the same fuel until it is sold and dye added or not.