How Red Dyed Diesel Pricing Works (2025 Guide)

Red Dyed Diesel is exactly like regular diesel in every way except that it’s red, available only for off-road use, and exempt from state and federal taxes. That last difference is the most important, because depending on which state you live in, using red dyed diesel in your off-road equipment can save you nearly a dollar per gallon.

What is Red Dyed Diesel?

Red dyed diesel is standard ultra-low sulfur diesel (ULSD) that’s been marked with a red dye to distinguish it from highway fuel. The red color signals that the fuel is not taxed for road use and is only for qualified off-road equipment.

Examples of approved uses include:

  • Farm equipment such as tractors, combines, and harvesters
  • Construction machinery like bulldozers, excavators, and cranes
  • Refrigerated trailers and generators
  • Off-road vehicles and equipment used by mining or forestry companies

Using red dyed diesel in a highway vehicle is illegal and can result in heavy fines.

Why Is Red Dyed Diesel Cheaper Than Regular Diesel?

The main reason for it being cheaper is because there are no taxes added. Clear (on-road) diesel includes both state and federal taxes, which can add $0.40 to over $1.00 per gallon depending on where you buy fuel. Since off-road equipment doesn’t use highways, those taxes don’t apply, hence why its cheaper.

Red Dyed Diesel Pricing by State

Below is a table that breaks down what costs taxes add to a gallon of diesel in each individual state, and how much can be saved when regular diesel is substituted for red dyed diesel in eligible off-road equipment.

State Diesel State Excise Tax ¢ Diesel Federal Excise Tax ¢ Savings With Dyed Diesel ¢
Alabama 29.00 24.40 53.40
Alaska 8.95 24.40 33.35
Arizona 26.00 24.40 50.40
Arkansas 28.50 24.40 52.90
California 38.90 24.40 63.30
Colorado 20.50 24.40 44.90
Connecticut 40.10 24.40 64.50
Delaware 22.00 24.40 46.40
District of Columbia 23.50 24.40 27.90
Florida 4.00 24.40 28.40
Georgia 32.20 24.40 56.60
Hawaii 16.00 24.40 40.40
Idaho 32.00 24.40 56.40
Illinois 46.70 24.40 71.10
Indiana 53.00 24.40 77.40
Iowa 32.50 24.40 56.90
Kansas 26.00 24.40 50.40
Kentucky 21.60 24.40 46.00
Louisiana 20.01 24.40 44.40
Maine 31.20 24.40 55.60
Maryland 27.85 24.40 52.25
Massachusetts 24.00 24.40 48.40
Michigan 27.17 24.40 51.57
Minnesota 28.50 24.40 52.90
Mississippi 18.00 24.40 42.40
Missouri 19.50 24.40 43.90
Montana 29.55 24.40 53.95
Nebraska 24.80 24.40 49.20
Nevada 27.00 24.40 51.40
New Hampshire 22.20 24.40 46.60
New Jersey 13.50 24.40 37.90
New Mexico 21.00 24.40 45.40
New York 8.00 24.40 32.40
North Carolina 38.50 24.40 62.90
North Dakota 23.00 24.40 47.40
Ohio 47.00 24.40 71.40
Oklahoma 19.00 24.40 43.40
Oregon 36.00 24.40 60.40
Pennsylvania 74.10 24.40 98.50
Rhode Island 34.00 24.40 34.20
South Carolina 26.00 24.40 50.40
South Dakota 28.00 24.40 52.40
Tennessee 27.00 24.40 51.40
Texas 20.00 24.40 44.40
Utah 31.90 24.40 56.30
Vermont 28.00 24.40 52.40
Virginia 27.00 24.40 51.40
Washington 49.40 24.40 73.80
West Virginia 20.50 24.40 44.90
Wisconsin 30.90 24.40 55.30
Wyoming 23.00 24.40 47.40

How Much Can You Save By Switching To Red Dyed Diesel?

Let’s take a company that purchases 2,000 gallons of regular diesel each month in Texas for off-road use. Using this information, we’re able to figure out that this company pays an extra $880 in taxes every month. If this company were to switch to red dyed diesel, then they’d save that money which in the course of a year would add up to $10,560. So this company could have an extra 10K at the end of the year, and just by switching to red dyed diesel.

A farm in Ohio burning 5,000 gallons of off-road diesel each year could save over $3,500 annually.

How to Buy Red Dyed Diesel

Unlike regular diesel, you generally can’t purchase red dyed diesel with a credit card at a retail station. To comply with state and federal regulations, you’ll need a business fuel card such as the CFN card,  or the Voyager fuel card.

Frequently Asked Questions

Yes, for farm, construction, and off-road equipment. It is not legal for highway vehicles.

On average, businesses save 30¢–$1.00 per gallon, depending on the state.

You can find red dyed diesel at many CFN cardlock and truck stop locations. Use the site locator to search by “Diesel Off-Road.”

In many areas, yes. Heating oil is nearly identical to dyed diesel, but local regulations may differ.

Not for highway vehicles. However, reefer trailers and auxiliary generators may use it legally.

red-dyed-diesel-cta