INDIANAPOLIS (WLKI)- Gov. Mike Braun has temporarily suspended restrictions on tax-exempt off-road diesel fuel for Indiana farmers and timber harvesters, allowing it to be used in trucks and semis for farm-related transportation during the fall harvest season.
The action comes as diesel prices in Indiana remain near record highs. The statewide average reached about $6.92 per gallon in September, according to the Indiana Capital Chronicle.
Braun's Executive Order 26-34 suspends certain special fuel restrictions for 30 days. The order allows farmers and timber harvesters to use tax-exempt diesel, commonly known as off-road diesel, for farm-related activities that would normally require taxed road fuel.
Off-road diesel is typically restricted to equipment not operated on public roads, including tractors, bulldozers and irrigation equipment. Because it is not subject to the same taxes, it can cost significantly less than standard diesel.
The governor said the temporary move is intended to give farmers immediate relief during harvest, when fuel use rises sharply for hauling crops, livestock and equipment.
"Today's action will make life more affordable for Hoosier families, farmers, and provide immediate substantial relief from high fuel prices," Braun said.
The Indiana Soybean Alliance has said off-road diesel can be 75 cents to $1 cheaper per gallon than regular diesel. Braun's administration estimated the order could save farmers about 64 cents per gallon.
Kevin Cox, a farmer from Brazil, Indiana, said the action could make a meaningful difference for agricultural operations consuming large amounts of fuel each day during harvest.
Cox said his operation can use hundreds of gallons of road fuel daily during the busy season, in addition to fuel used by off-road equipment.
The governor's order followed a letter from 52 state lawmakers urging Braun to relax the restrictions. State Rep. Jim Pressel, R-Rolling Prairie, said lawmakers saw the request as an important way to help farmers dealing with high operating costs.
Indiana House Speaker Todd Huston, R-Fishers, also voiced support for the move, saying the state's financial position gives Indiana flexibility to provide relief during a difficult period for farmers and working families.
Braun said the temporary diesel measure is expected to cost the state between $1 million and $3 million.
The governor also renewed Indiana's suspension of gasoline sales and excise taxes for another 30 days, keeping those taxes off pump prices through early November.
Braun said a broader diesel tax holiday is not currently planned. Such a move, he said, would require cooperation from the General Assembly.
Patrick De Haan of GasBuddy said diesel costs affect more than motorists because the fuel is used throughout the transportation and shipping industries.
"Diesel is the fuel that moves the U.S. economy," De Haan said.
Democratic House Minority Leader Phil GiaQuinta of Fort Wayne supported the governor's move but described it as temporary relief. He said farmers continue to face financial pressure from fertilizer costs, trade issues and other challenges.
Braun's order will be reviewed when it expires in early November to determine whether additional action is needed.