Updated October 23, 2026

Fuel costs have been a challenge for farmers, contractors, fleets and businesses throughout our area. Recent federal and North Carolina announcements could provide some temporary relief, but the changes don’t all work the same way.

On October 5, 2026, President Trump signed an executive order addressing diesel fuel taxes and the use of dyed, or off-road, diesel in highway vehicles. North Carolina has also passed legislation temporarily suspending its state motor fuel excise tax and providing additional relief involving dyed diesel.

Here’s what customers should know about these changes.

North Carolina Temporarily Suspends State Fuel Tax

North Carolina has taken steps to help ease fuel costs for businesses and consumers across the state.

On October 9, 2026, Governor Josh Stein signed legislation temporarily suspending North Carolina’s motor fuel excise tax.

From October 10 through November 30, 2026, the state motor fuel excise tax rate is reduced to zero cents per gallon. This applies to gasoline, diesel and other motor fuels covered by the legislation.

The suspension does not eliminate federal fuel taxes or North Carolina’s separate fuel inspection tax. Other applicable tax requirements also remain in effect.

Will Fuel Prices Drop Immediately?

Not necessarily.

Fuel purchased by retailers and distributors before October 10 may still include the state excise tax paid before the suspension took effect. North Carolina’s legislation allows retailers to account for that previously taxed inventory.

As that inventory is sold and replaced with fuel purchased under the new tax rate, customers may begin seeing the savings reflected in pricing.

That means prices won’t necessarily drop by the full 41 cents per gallon overnight. The timing will depend partly on when fuel was purchased and when existing inventory is replaced.

What About Federal Fuel Taxes?

North Carolina’s state fuel tax suspension and the federal dyed diesel relief are two separate developments.

The IRS announced temporary federal penalty relief for the sale and highway use of dyed diesel from October 1 through December 31, 2026. On October 21, the IRS issued additional guidance providing relief from certain federal reporting and recordkeeping requirements related to dyed diesel used on highways. This includes specific Form 720 reporting requirements for qualifying transactions during that period.

These changes do not eliminate the underlying federal fuel tax obligations. Other applicable tax reporting and recordkeeping requirements remain in effect, and North Carolina’s separate rules still apply.

Can Dyed Diesel Be Used in On-Road Vehicles in North Carolina?

Federal Relief

On October 14, 2026, the IRS announced that it would not impose certain federal penalties when dyed diesel is sold for highway use or used in highway vehicles nationwide from October 1 through December 31, 2026.

This federal penalty relief applies to sellers and highway users, not just agricultural customers.

North Carolina Relief

North Carolina has its own rules.

From October 9 through December 31, 2026, the state is waiving certain penalties for highway use of dyed diesel connected with farming and agricultural purposes. The legislation also provides temporary penalty relief for people who dispense or allow dyed diesel to be dispensed into highway vehicles.

Separately, from October 1 through December 31, 2026, North Carolina provides a state motor fuel excise tax exemption for certain qualifying farmers, conditional farmers, commercial loggers, commercial fishermen and wildlife managers who hold the required exemption certificates.

Those qualifying users must still file the required motor fuel tax return, even when no state motor fuel excise tax is owed on the exempt fuel.

North Carolina sales and use tax generally continues to apply to dyed diesel unless the purchaser provides appropriate exemption documentation.

What does this mean for customers?

Federal relief does not override North Carolina’s separate fuel tax and dyed diesel requirements. Although the IRS has temporarily waived certain federal penalties for highway use of dyed diesel, North Carolina’s highway-user penalty relief applies only to farming and agricultural purposes. Customers must still comply with applicable state requirements.

Fuel regulations can vary depending on how and where the fuel is used. Customers are responsible for understanding and following the federal and North Carolina requirements that apply to their vehicles and equipment. If you’re unsure whether dyed diesel is permitted for your intended use, we encourage you to review the current regulations before fueling.

Where Can You Buy Off-Road Diesel in Concord, NC?

Customers can come to our location and fill their fuel tanks for approved uses, including equipment, machinery, generators and farm operations.

For businesses, contractors and farmers in Cabarrus County, Mecklenburg County and the surrounding area, this gives you a convenient local option without having to wait for a scheduled fuel delivery.

Frequently Asked Questions About Off-Road Diesel

Can I buy off-road diesel directly from Propst Brothers?

Yes. Customers can come directly to our 829 Davidson Drive NW location in Concord, NC and fill their fuel tanks with off-road diesel for approved uses.

Do I have to schedule an off-road diesel delivery?

No. Off-road diesel is available directly at our Concord location. Customers can come to Davidson Drive and fill up rather than scheduling a fuel delivery.

Can I use off-road diesel in my on-road truck in North Carolina?

Temporary federal penalty relief is available for highway use of dyed diesel through December 31, 2026. However, North Carolina has separate requirements, and its highway-user penalty relief is limited to farming and agricultural purposes.

Before using dyed diesel in an on-road vehicle, make sure you understand the federal and North Carolina requirements that apply to your intended use.

Is off-road diesel the same as regular diesel?

Off-road diesel and clear diesel are similar fuels, but off-road diesel contains a red dye to identify fuel that is generally sold for qualifying off-road uses and is treated differently for tax purposes.

We’ll Keep You Updated

Propst Brothers has been serving this community since 1937. When something changes that could affect our customers and local businesses, we want to make sure you know about it.

We’ll continue following federal and North Carolina developments and share updates as additional guidance becomes available.

Need off-road diesel? Give us a call or stop by our Davidson Drive location in Concord.

Propst Brothers Commercial Fuel

Serving Cabarrus, Mecklenburg and surrounding communities since 1937.