Diesel fuel that is dyed red is assumed to not be highway fuel and may not be used in highway vehicles since it does not meet federal, diesel quality standards (e.g., sulfur content) unless it is used in a manner that is tax-exempt as defined by the IRS. The IRS has temporarily suspended that requirement in certain states because of the difficulty in getting food and grain stocks from the farm belt in the middle of the country down the major highways and the Mississippi River to Ports in New Orleans and elsewhere on the Gulf Coast. The port of New Orleans with the exception of the offshore oil terminal is effectively shut down. I have not checked the status of barges yet to see when they might begin operating again. [I posted the previous just to give an idea to readers a rough overview of the subject]
The IRS release on this subject was posted Sept. 2, 2005. Here is the link.
http://www.irs.gov/newsroom/article/0,,id=147221,00.html.
Here is the key sentence in the release:
"This relief applies beginning August 25, 2005, in Florida, August 30, 2005, in Alabama, Louisiana, and Mississippi, and August 31, 2005, in the rest of the United States, and will remain in effect through September 15, 2005."
This will have no affect on your outstanding contracts. The only affect will be on the carriers themselves who may use dyed diesel for their operations if they choose to do so. Whether the exemption will be extended beyond 15 sept. is an open question. After Hurricane Dennis only a handful of counties in Florida were exempted for a short period of time, and no further extensions were applied. Not knowing were you are farming and what products you are harvesting in the near future it is difficult to predict what diesel prices might be in your area in the days ahead depending on where your sources of supply are located. I assume your existing contracts extend thru the harvest season.
All the indices on the NYMEX were down today. That could mean anything in todays market with large daily swings on crude oil (CL) quite common.
I did check the Shell Oil site and the Motiva Norco and Convent refineries should restart next week. Their Capline pipeline system in the Gulf is operating at abt. 75% capacity. Pumping stations in Mississippi are down due to electric utility outages. They will be back at 100% capacity availability as soon as those services are restored. There was no damage to their piping system in Lousiana.
Also see NYMEX reiteration of rule with respect to the EPA's announcement here: http://www.nymex.com/press_releas.aspx?id=pr20050831c
I spoke with my Sis today; we have contracts and already stored fuel (on the farm) totaling about two-thirds of what we will need.
The other third might be dicey...we will probably be able to get it since we are a larger customer...but it might be expensive, depending on the situation in mid-October.