Agricultural fuel, often known as farm fuel or red diesel, differs from regular diesel primarily in its taxation and permitted usage. Agricultural fuel is dyed red to indicate its tax-exempt status for non-road agricultural and construction machinery. It typically has a lower duty rate than regular diesel intended for use in vehicles like cars and trucks. While the chemical composition of agricultural fuel is similar to that of regular diesel, its red dye distinguishes it as being solely for specific off-road applications. This distinction is crucial as it helps prevent tax evasion and ensures that the fuel is used appropriately in eligible machinery, such as tractors, combine harvesters, and stationary engines on farms and construction sites. However, it's important to note that using
agricultural fuel in vehicles designed for road use is illegal and subject to penalties.