Gas Oil: What is it and What Does it Do?

Learn more about gas oil, who uses it and if it could benefit your business

Whether you’re new to gas oil and looking to learn more about it or have been using it for many years and simply curious to learn more, we’ve put together a short guide to help you get up to speed with gas oil.

You can also call and discuss your requirements with our gas oil experts, by calling us today on 0330 123 3773.

What is gas oil and is it known by any other names?

Gas oil is known by a few names, but one of the more popular names is red diesel due to the red dye marker that was added to gas oil from the 1960s to help authorities to quickly check if a vehicle was being run on gas oil.

The reason for this is because red diesel and white diesel (also known as road diesel or just diesel) are essentially the same fuel, but taxed very differently. The white diesel you see available from petrol stations throughout the UK is taxed at a far higher rate in line with petrol, whereas red diesel (gas oil) has a far lower fuel duty applied to it.

This makes it very tempting for many diesel vehicle owners looking to save money, to buy and use it in their vehicles. However, it is illegal to use gas oil on public roads, hence the need to use the red dye markers in order to spot any illegal use on public roads.

You may have noticed and wondered if gas oil had anything to do with the fuel known simply as “gas” in America or maybe “natural gas” which is used to heat homes and business in the UK. In short, they’re all different products, so lets start with the latter two products first and then we’ll get back to gas oil.

Gas / Gasoline (USA)

It’s easy to see where some people may become confused and assume that when Americans talk about filling their vehicles with gas, they’re talking about using gas oil.

However, gas is simply a shorthand way of saying and writing gasoline, in the same way as we in the UK have shortened petroleum to petrol. They’re simply two (or rather four) names for the same product, so nothing to do with gas oil.

Gas / Natural Gas / Fossil Gas (UK)

Although you will quickly realise now that natural gas which the majority of businesses and homes know well for piping heating and cooking fuel into our homes and businesses. Isn’t technically anything like the liquid fuel known as gas oil.

Gas Oil / Red Diesel

Gas oil was originally used for heating homes and businesses before natural gas become more prevalent. But as time went on and motor vehicles became more widespread, gas oil also became a popular fuel for use in many vehicles in the early part of the 20th century.

Although the government introduced fuel duty on fuels intended for use in road vehicles in 1928, there was a rebate for gas oil which had existed in one form or another between 1928 and 1935 because gas oil was still mainly used for heating at the time.

By 1935 due the widespread use of diesel engine road vehicles, the government withdrew the rebate for use in road vehicles, leaving it in place for all other uses including heating and for those vehicles that were already paying the lower rate of vehicle excise duty (VED) such as tractors and other agricultural machines, which became known as “excepted vehicles” that would only be used on public roads occasionally, so were not considered to be “road vehicles”.

It wasn’t until 1961 that a red dye marker was added to gas oil, leading to the nickname “red diesel”, a name which has slowly grown in popularity with the majority of people these days knowing it as red diesel rather than gas oil.

How is gas oil made and where does it come from?

Gas oil comes from crude oil, the crude oil that is pumped out of the ground is a black liquid, known as petroleum. Depending on the way that the crude oil is distilled, a variety of fuels can be made.

The illustration below shows a more detailed view of how gas oil and other fuels are distilled from crude oil.

Which industries use gas oil?

Following new rules that came into effect on the 1st of April 2022, the following industries and applications are permitted to use the rebated fuel:

• Rail transport
• Community amateur sports clubs and golf courses
• Sailing, boating and marine transport (excluding private pleasure craft in Northern Ireland)
• Travelling fairs and circuses
• Fuel used for non-commercial purposes – electricity generation and heating
• Agriculture, horticulture, fish farming and forestry

Further information and gas oil quotes

Hopefully, the information on this page has answered many of the questions you may have had about gas oil. We have further information about gas oil (red diesel) in our FAQ.