Off Road Diesel Fuel

What is Off Road Diesel Fuel?

Off-road diesel fuel (dyed diesel fuel) is used to power diesel fuel engines in off-road applications.  Examples of machinery powered by off road diesel fuel (dyed diesel fuel) include construction equipment (bulldozers, excavators, cranes, backhoes and other machinery used at construction sites, portable generators (used to provide temporary power following natural disasters, man-made disasters, power outages and in remote areas without access to permanent sources of power), trains and locomotives, temporary heaters, boats and industrial machinery (pumps, compressors).   Industries that use off road diesel fuel include the following:

  • Construction
  • General contractors
  • Electrical contractors
  • Remediation contractors
  • Equipment rental companies
  • Landscapers
  • Towing companies
  • Trains and locomotives
  • Refrigerated trailers
  • Food distribution
  • Temporary heat
  • Freight companies
  • Warehouses
  • Environmental remediation contractors
  • Boats and marinas
  • Farm equipment

Why is Off Road Diesel Fuel Dyed Red?

Diesel fuel can be used for on-road applications (mainly trucks) and for many off-road applications such as construction equipment, generators, industrial machinery, boats, trains, locomotives, rail maintenance equipment and many other applications.  The diesel fuel used in trucks is the same, chemically, as the diesel fuel used in off-road equipment.

However, on-road diesel fuel and off-road diesel fuel are taxed very differently.  Typically, on-road diesel fuel is subject to state and federal road taxes which are currently as much as $.885 per gallon.  Off road diesel fuel is typically not subject to those taxes, but rather state sales taxes that are far lower than state and federal excise taxes.

At one time, diesel fuel was not dyed at all.  This led to abuses where unscrupulous individuals and businesses failed to report and pay excise taxes on their on-road diesel fuel consumption.  The federal government and the states now require fuel used in on-road applications to be clear, un-dyed fuel, whereas fuel used in off-road applications may be dyed, hence the name off road diesel fuel.

Federal and state inspectors routinely set up check points along public roads to ensure that trucks are in compliance with the Department of Transportation rules regarding the operation of commercial motor vehicles.  During those inspections, it is common for inspectors to sample the fuel in the truck’s fuel tank. Under the Internal Revenue Code, any person who refuses to allow an inspection will be fined $1,000 for each refusal and the vehicle may be impounded. And, the penalties are steep.  The Internal Revenue Code provides for a penalty of $1,000 or $10 per gallon, whichever is greater, plus payment of the tax. States may impose additional fines.

Is Ultra Low Sulfur Off Road Diesel Fuel (Dyed Diesel Fuel) the Same as Off Road Diesel Fuel (Dyed Diesel Fuel)?

Yes.  The term dyed diesel fuel is often used interchangeably with certain other terms describing the same product, such as off-road diesel fuel, dyed diesel, red diesel fuel or ultra-low sulfur dyed diesel fuel.  Those terms all refer to the same product, namely diesel fuel that is dyed red so that it can be easily identified for tax purposes as suitable only for off-road uses.  The phrase ultra-low sulfur refers to the fact that under prevailing environmental law, diesel fuel (both on-road and off-road diesel fuel) must contain no more than 15 parts per million sulfur. The 15 ppm sulfur standard was imposed by the EPA in order to reduce carbon and other noxious emissions from diesel engines.  Heating oil, used in homes also is dyed red, but in many jurisdictions heating oil may contain more than 15 ppm sulfur.  It typically is a few cents per gallon cheaper than dyed diesel fuel.  Because heating oil does not contain the same lubricity as commercial dyed diesel fuel and in some cases also fails to meet EPA ultra-low-sulfur requirements, it is important to entrust your dyed diesel fuel requirements to a company that specializes in commercial off-road diesel fuel distribution, as heating oil companies may only carry heating oil on their trucks, which could damage your diesel powered equipment or subject you to EPA scrutiny and penalties.