Dyed diesel explained: what it is and where it is legal
Dyed diesel costs less because no road tax is paid on it. What that means for boats and equipment in North Carolina, and where it is illegal.
What the red dye means
Dyed diesel is standard diesel with red dye added to show that road tax has not been paid. That is the only difference. Engines run on it exactly as they do on road diesel.
Because no road tax is paid, it costs less per gallon.
Where it is legal
Dyed diesel is intended for anything that does not operate on public roads: boats, excavators, loaders, dozers, lifts, light towers, compressors and generators.
It is illegal in any licensed vehicle on a public road, such as a pickup or dump truck. Doing so is a federal violation, and the dye remains detectable in a tank sample long after purchase.
A common compliance mistake
Contractors who run both equipment and road trucks need two fuels: off-road diesel for the equipment and taxed diesel for the trucks. Filling both from the same tank is exactly what the dye is designed to catch.
Metered delivery to each machine provides a record of where every gallon went.
Why off-road diesel is usually delivered
Most gas stations do not sell off-road diesel, and an excavator cannot drive to a station. The alternative is a run with fuel cans, which means paying road tax on fuel that does not require it.