Introduction
Dyed diesel, also known as off-road diesel, red diesel, or farm diesel, is chemically identical to the clear diesel fuel you find at gas stations. Dyed diesel does not differ in quality and performance from clear diesel.
The only difference is that dyed diesel contains a colored dye, which typically looks red or pink, added at fuel terminals to distinguish it from regular on-road diesel fuel.
If dyed diesel and clear diesel are the same, why is one dyed? Here’s what you need to know about the differences between off-road vs. on-road diesel and how they can affect your commercial vehicles, equipment, and bottom line.
Taxes and Price Differences
The distinction between on-road vs. off-road diesel fuels lies in taxation. Clear diesel used on public roads includes both federal and state taxes, which help fund highway maintenance and infrastructure. Off-road diesel, however, is exempt from these road-use taxes, making it significantly cheaper than its clear counterpart.
The cost savings between dyed and clear diesel vary significantly by state. While some states have no additional tax on off-road diesel, others maintain a reduced tax rate. The price difference can range from approximately 20 cents to 90 cents per gallon, with states like California showing the highest differential.
Legal Uses and Applications
Off-road diesel is designated for use in:
- Any equipment not operated on public roads
- Agricultural machinery
- Construction equipment
- Generators
- Marine vessels
- Military vehicles on private bases
- Refrigeration units on trailers
Regulatory Requirements for On-Road vs. Off-Road Diesel
- Companies using on-road diesel must file quarterly IFTA (International Fuel Tax Agreement) forms
- States like Texas and Alaska require specific permits for using dyed diesel
- Businesses must maintain fuel receipts, delivery tickets, and invoices for at least three years
- Storage tanks must be properly labeled and maintained to prevent misuse
Enforcement, Detection, and Penalties
The Department of Transportation (DOT) and other regulatory agencies actively monitor diesel fuel usage. DOT officers can check fuel tanks during routine inspections.
If dyed diesel is detected in on-road vehicles, authorities may conduct same-day or next-day inspections of all vehicles at the company’s location. The dye makes it easy for inspectors to identify non-compliant fuel usage with off-road diesel.
The government takes the misuse of dyed diesel seriously. Federal penalties can include:
- $10 per gallon in the vehicle’s tank or $1,000, whichever is greater
- Up to $2,500 per vehicle during company-wide inspections
- Criminal charges for repeat offenders
- Suspension of fuel licenses in certain states
- Additional state and federal tax penalties
Availability and Purchase
Unlike clear diesel, which is readily available at gas stations, dyed diesel is primarily accessible through fuel suppliers who deliver directly to storage tanks or equipment on-site. The exception is agricultural co-ops in farming communities, where off-road diesel may be available at select pumping stations.
Need Reliable Diesel Fuel Delivery?
Need diesel fuel for your business? Fuel Go offers competitive pricing on both clear and dyed diesel with nationwide delivery service. Contact us today for a free, no-obligation quote and experience the convenience of transparent pricing and reliable delivery.
