Everything you need to know about Red Diesel (Gas Oil)
Red diesel, also commonly known as gas oil, tractor diesel, agricultural diesel, or 35-second oil (especially when used for heating), is essentially the same as regular white diesel (DERV – Diesel Engined Road Vehicle fuel) that you’d put in a car or lorry.
The key difference is that red diesel has a red dye added to it.
What is Red diesel
The red dye acts as a fiscal marker. It indicates that this fuel has been taxed at a much lower rate of fuel duty compared to standard white diesel. This lower tax rate is intended to provide a financial concession to specific industries and users where fuel is a significant operational cost and the vehicles or machinery are primarily used off-road.
The landscape of fuel usage in the UK has undergone a significant transformation. As of 1st April 2022, major changes to the tax treatment of red diesel have come into force, impacting a wide array of industries that have long relied on this rebated fuel.
The rules around who can use red diesel are strict and have changed significantly in the UK, notably from April 1, 2022. The entitlement to use red diesel has been removed for many sectors. As of now, the primary permitted users of rebated red diesel in the UK include:
- Agriculture, Horticulture, Forestry, and Fish Farming: For vehicles, machinery, and appliances used for these purposes.
- Homes (though kerosene is more common for domestic heating oil)
- Hospitals, schools, places of worship
- Community amateur sports clubs (CASCs)
- Some other specific non-commercial premises.
- Rail Transport: For passenger and freight trains.
- Non-Commercial Heating and Power Generation: This includes heating and electricity generation for:
- Travelling Fairs and Circuses: For powering machinery and attractions.
- Certain Non-Commercial Craft/Vessels: Such as those used by charities for rescue operations, or private pleasure craft (though specific rules apply for propulsion vs. domestic power onboard).
- Construction (for most plant, machinery, and vehicles)
- Mining and quarrying
- Manufacturing
- Logistics and haulage (for auxiliary engines like refrigeration units on lorries)
- Most commercial heating uses
- Leisure (e.g., powering ski lifts, golf course mowers)
- Private Road vehicles
Using red diesel illegally (i.e., in a road vehicle or for a non-entitled purpose) is a serious offence. HM Revenue & Customs (HMRC) actively enforces these rules. Penalties can include:
- Heavy fines
- Back-payment of the duty difference
- Seizure of the vehicle or machinery involved