X pue Y means that X smells Y.
Whether X is inanimate or not makes no difference. X is the object/person/whatever that smells and Y is the smell.
Puer is intransitive. There is never an object that is pué by the subject (the past participle doesn’t even exist).
Le diesel is nevertheless a complement that specify what odor it is about. It somewhat looks like a complément attributif.
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