The impacts of rising diesel costs are becoming harder to ignore.

As a result of the Iran war, the average cost of a gallon of diesel in the U.S. has risen about 72%, from $3.66 to $6.32 as of Oct. 15, according to AAA, the nation’s largest travel membership organization. In Wrangell, a gallon of highway diesel currently goes for around $7.21 per gallon.

The financial burden of rising costs goes beyond filling up at the pump, and the borough assembly is considering helping.

At its Oct. 13 meeting, the assembly approved in first reading a temporary ordinance that would waive Wrangell’s 7% general sales tax for heating fuels delivered between Nov. 15, 2026, and Feb. 15, 2027.

The waiver is intended to alleviate some of the burden caused by increased fuel costs for those heating their homes with oil through the coldest months of the year.

“This allows for a little bit of reprieve for community members that are facing higher energy costs,” Borough Manager Mason Villarma said at the meeting.

After an intense discussion over the fairness of the ordinance, it was approved for a second reading with a public hearing set for Oct. 27.

The ordinance was sparked by the extra $200 that was included in this month’s Permanent Fund dividend — paid annually to Alaska residents — which state legislators appropriated to help people with higher energy costs, according to Mayor Patty Gilbert.

“I wondered if there’s an opportunity that we should take to forego sales tax on transportation and heating fuel for maybe five days at a time throughout the winter, and on an as-needed basis.” Gilbert said to the assembly on Sept. 22.

While the original idea was to turn the tax on and off as needed, Villarma said in an interview on Oct. 14 that doing so would be hard to manage. Instead, borough staff took the idea and adjusted it to heating oil used across the coldest months.

The tax holiday would cover No. 1 heating oil, which is kerosene, and No. 2 heating oil, which is diesel. No. 1, which flows better in cold temperatures, is more common in Alaska.

Assembly Member Dave Powell expressed concerns over whether it would be fair to only offer a tax break to people heating their homes with fuel and not some other way.

“The only problem I have is that we are only targeting one entity of how to heat a home,” Powell said at the Oct. 13 meeting. “I would suggest, if you want to do that in those months, that we look at removing the sales tax for any part of heating a house.”

More than 60% of Wrangell households stay warm with electric heat, according to the 2024 American Community Survey based on U.S. Census data.

Fortunately for those households, however, Wrangell’s electricity rates are among the lowest in the state. That makes heating a home with electricity lower than the rest of the state, Villarma said. He pointed out that an electricity bill does not separate out what portion of the electricity is used for heat, making it nearly impossible to measure.

Villarma also said the borough regularly offers free firewood taken from municipal properties to residents.