Fuel is a significant expense for any company that operates large numbers of diesel engines, whether those engines are found in passenger vehicles, commercial vehicles, heavy equipment, or industrial machinery. Fuel costs normally outstrip every other fleet or plant maintenance expense, quickly becoming a significant budget item.

For operators of heavy equipment, off-road vehicles, and industrial machinery, switching to off-road diesel can mean considerable savings on fuel costs without requiring a single compromise in engine and fuel performance.

In this month’s article, we’ll look at off-road diesel: who can use it, why it’s less expensive, and what can happen to operators who don’t follow the letter of the law for its proper use.

What Is Off-Road Diesel?

Chemically speaking, off-road diesel (also called dyed diesel, red diesel, and farm diesel) is the same diesel fuel that comes out of the pump at your neighborhood gas station, plus a little bit of red dye. It offers the same performance, contains the same additives and preservatives, is refined to the same level of clarity and purity, and (aside from its color) is indistinguishable from highway ultra-low-sulfur diesel (ULSD).

Before 2010, off-road diesel was commonly a less-refined grade of diesel that contained more sulfur than standard highway diesel. Since 2010, however, off-road products are required to meet ULSD standards.

However, speaking from the standpoint of cost, off-road diesel is a very different product. The addition of red dye marks it as intended for off-road use only. Off-road diesel is exempt from state and federal excise taxes. This exemption lowers the fuel’s price for the end user, depending on the tax situation in their specific state. In Georgia, for instance, off-road diesel is about 50 cents cheaper per gallon.

Why Is Off-Road Diesel Red?

The red dye does not change the fuel’s performance or nature. Rather, it is added to ensure that it is being used in accordance with state and federal law.

The laws governing fuel sales require federal and (in most states) state excise taxes to be paid on any fuel used to power a vehicle operating on public roads. These taxes are factored into the per-gallon price of every drop of fuel sold at a standard retail location.

By purchasing off-road diesel, you’re essentially promising that the fuel you’re buying will only be used to power off-road vehicles and equipment. That definition can include earthmoving equipment, farm tractors, trucks and other vehicles that are not registered for on-road use, marine applications, and installed equipment like generators.

The red dye allows law enforcement or inspectors to quickly determine if someone has put untaxed off-road diesel into the tank of a highway vehicle. During a compliance check, an officer or agent can use a long dip tube to collect a sample of fuel from a vehicle’s tank and check for the presence of red dye.

Where Can I Buy Off-Road Diesel?

There are several ways to purchase off-road diesel. The amount of fuel you use will help you determine which way is best for you:

• If you’re only fueling a single tractor for a small hobby farm or another off-road use, off-road diesel can be found at the pump at some retail fuel stations.
• Off-road diesel can also be delivered in bulk by your local fuel distributor. If your business uses large amounts of fuel, you may choose to lease a fuel storage tank and dispensing equipment and arrange for regular bulk fuel deliveries.

What Can Happen if I Use Off-Road Diesel in an On-Road Vehicle?

Nothing will happen to the vehicle. You won’t notice any difference in its performance or efficiency. The adverse effects of running off-road diesel in a highway vehicle start when your vehicle is inspected by law enforcement, tax agents, or other regulators.

The federal government sets the penalties for abusing off-road diesel. If you’re caught operating a registered highway vehicle with off-road diesel, you will pay the higher of two possible fines:

• $1,000 or
• $10 per gallon of off-road diesel in your vehicle

In the past, during times of supply chain disruptions, such as the Southeastern fuel shortages caused by the Colonial Pipeline ransomware attack in 2021, the IRS has temporarily suspended the ban on using off-road diesel in on-road vehicles – provided that the fuel distributor pays the appropriate federal excise tax. These lifts of the prohibition are typically short-lived and limited to a specific geographical area.

Ready to Embrace the Savings of Off-Road Diesel? Let the Local Pros at Walthall Help!

Whether you only need to fill up a small tank or an entire jobsite worth of heavy equipment, we have an off-road diesel solution that will work for you. With off-road diesel available at many of our retail locations and Fuel Pro cardlock stations, as well as convenient and affordable bulk delivery options, Walthall can help you save money on fuel. Give us a call today to find out how Walthall Oil Company can work for you! (478) 781-1234

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