The tax that is applied to fuel is called “federal excise tax”. In the United States, this tax amounts to over 18 cents a gallon on gasoline and almost 25 cents a gallon for diesel fuel. To this, average state taxes are added, the total tax on fuel amounts to 48.8 cents for every gallon of gasoline and 54.4 cents for diesel.
Diesel which is used for construction equipment, farming and for home heating purposes is dyed red and is free of tax, thus reducing the price of a gallon of diesel fuel by the taxed amount of 54.4 cents. With this kind of a tax, it is easy to see why people opt to pay off road diesel prices when they know they will use the fuel illegally.
The diesel that is used for off road vehicles and home heating oil can be used in older diesel car engines where the engine ran on high sulfur diesel. In the last 10 years, massive improvements in diesel engine technology have brought along new engines which are far less polluting than the older engines. These new engines run on low sulfur diesel.
The difference in sulfur content is dramatic; diesel which is sold at off road diesel prices has 500 ppm of sulfur whereas the diesel now used in on-road vehicles is mandated to be 15 ppm. The new diesel engines not only are much friendlier to the environment, they will by default, eliminate much of the illegal use of red diesel. Automobile manufacturers have warned buyers of their new diesel fuel cars that using anything other than low sulfur fuels will damage the engine and invalidate the warranty.
There are still many older diesel fueled vehicles in existence; these are the vehicles that can run on un-taxed fuel. It is especially true in rural communities where off road diesel prices are applied for deliveries of fuel destined for use in tractors, combines, etc., all the equipment not normally seen on the road. As the fuel is stored in tanks on the farm, many farmers put the fuel in their pick-up trucks. The police in these areas are very aware of this illegal use of the fuel and they are equipped with sensing equipment that can tell instantly if the fuel is untaxed red diesel or legal white diesel. The act is tax evasion and the penalties can be very high, including seizure of the vehicle.
Unfortunately, this illegal use can easily migrate to the city as well. Untaxed red diesel is used as home heating oil so it is easy for the homeowner to withdraw fuel from his storage tank for use in his diesel powered car.
Untaxed, low off road diesel prices are available from Petroleum Kings. They deliver to wherever red diesel is legal to use; farms, construction sites and carnivals where diesel generators are commonly employed.
