10/06/2026
Fuel Price Update: CLA Is at the Table
Fuel prices continue to put tremendous pressure on North Carolina’s logging industry, but over the past several days we have seen movement at both the state and federal levels.
North Carolina lawmakers are returning to Raleigh Wednesday for a special session focused on possible state tax relief for gasoline and diesel fuel. What that relief will ultimately look like has not yet been determined, but the Carolina Loggers Association has been engaged in these discussions and is making sure the concerns of professional loggers, truckers, and logging businesses are part of the conversation.
There has also been an important development at the federal level.
On October 5, President Trump signed an Executive Order addressing the highway use of dyed diesel fuel. The order directs the U.S. Department of the Treasury to determine and implement available relief for certain federal diesel fuel tax obligations incurred from October 5 through December 31, 2026. It also directs the IRS to provide penalty relief related to dyed diesel used on highways during that period.
According to information provided to CLA by the North Carolina Convenience & Petroleum Marketers Association (NCPCM), the federal excise tax on diesel fuel is 24.4 cents per gallon.
However, there is an important distinction members need to understand.
The federal action does not automatically eliminate North Carolina’s state motor-fuels tax.
North Carolina has already announced that through December 31, it will not impose the usual penalty when dyed diesel from bulk storage is used on highways for farming and agricultural purposes. Importantly for our members, the North Carolina Department of Revenue specifically defines those purposes as including forestry.
That means forestry operations are specifically recognized under the state’s current dyed-diesel relief.
But the North Carolina excise tax must still be paid. The state motor-fuels excise tax for 2026 is 41 cents per gallon, and vendors or bulk end-users using dyed diesel on the highway under this relief must properly report and pay that tax.
So, for now, the message to our members is simple:
Do not assume dyed diesel is completely tax-free for highway use.
Federal relief is moving forward, but additional Treasury and IRS guidance is still needed to spell out exactly who qualifies, what taxes may be deferred, the conditions involved, and when any deferred taxes would ultimately have to be paid.
At the state level, forestry is included in North Carolina’s current dyed-diesel penalty relief, but the 41-cent state excise tax remains due unless further action is taken by the General Assembly.
That is why Wednesday’s special session matters.
CLA will continue working with our elected officials and industry partners to make sure North Carolina’s logging community is represented as these decisions are made.
CLA is at the table. Your industry is part of the discussion.
We will keep our members updated as additional state and federal guidance becomes available.
Sources:
North Carolina Department of Revenue, Dyed Diesel Notice, October 1, 2026
The White House, Emergency Tax Relief on Diesel Fuel, Executive Order, October 5, 2026
North Carolina Convenience & Petroleum Marketers Association (NCPCM), information provided by Gary Harris, Executive Director