Virginia Allows Temporary On-Road Use of Dyed Diesel Through 2026

Virginia Governor Abigail Spanberger issued Executive Directive 5 on October 16, 2026, authorizing the temporary use of dyed diesel in on-road vehicles. The directive responds to rising diesel prices attributed in the announcement to global market and trade disruptions, with the stated goal of reducing costs for farmers, loggers, haulers, and families. The authorization runs through December 31, 2026, making this a time-limited operating change rather than a permanent revision to fuel rules. The Governor said the measure is intended to keep “equipment running, food and goods moving, and small businesses operating.”

The directive instructs the Virginia Department of Motor Vehicles (DMV) to use its authority to waive penalties for on-road use of dyed diesel and to help users take advantage of the measure. Within five business days of the directive, DMV must publish the process for remitting state-owed diesel tax on fuel used on Virginia roadways. That process is an important implementation detail: the authorization does not eliminate the state tax obligation, and users will need to understand how to report and pay it. Businesses should also retain fuel-purchase and eligibility records and assess applicable federal tax requirements with the Internal Revenue Service (IRS) or a qualified tax adviser.

For government contractors and suppliers, the change may affect estimates for fuel-intensive work in Virginia, including hauling, logging, farming, transportation, and equipment operations. Firms preparing bids, evaluating subcontractor costs, or managing current performance may wish to account for the temporary fuel flexibility while confirming that their operations qualify and that state-tax remittance procedures are followed. The measure is not a solicitation, contract award, or direct government payment; its procurement relevance is indirect, through potential operating-cost changes and supply-chain continuity. The end date should be incorporated into pricing assumptions, particularly for work extending beyond 2026.

The Governor’s announcement describes pressure on essential industries that move food, feed, harvest equipment, timber, and other goods and critical materials. Virginia Farm Bureau President Scott Sink said the measure could provide relief to farmers who feel fuel costs when hauling crops during harvest or trucking cattle to market. Virginia Loggers Association President Frank Myers called it meaningful short-term help for loggers and expressed interest in continued collaboration on longer-term stability. Secretary of Agriculture and Forestry Katie Frazier said agriculture and forestry face global trade disruptions, increased input costs, weather impacts, and higher diesel costs. These comments underscore that the directive is a near-term cost-management measure, not a resolution to the broader market pressures described by the administration.

• Executive Directive 5 temporarily authorizes dyed diesel for on-road use in Virginia through December 31, 2026.
• The directive asks the Virginia DMV to waive penalties for covered use and support implementation.
• DMV must publish, within five business days, instructions for remitting state diesel tax owed on roadway use.
• The stated beneficiaries include farmers, loggers, haulers, and other businesses moving food, feed, timber, equipment, and critical materials.
• The Virginia Farm Bureau highlighted potential benefits for crop hauling during harvest and cattle transport to market.
• The Virginia Loggers Association described the directive as short-term assistance and called for longer-term industry stability.
• Contractors should assess fuel-cost assumptions for Virginia work involving transportation, hauling, forestry, agriculture, or heavy equipment.
• Users should preserve fuel and eligibility documentation and review federal tax obligations with the IRS or a tax adviser.
• The measure is a regulatory operating-cost change, not a procurement opportunity or contract award; its temporary end date matters for pricing and performance planning.
• The source announcement identifies global trade disruptions, increased input costs, and weather impacts as pressures on agriculture and forestry.