Red diesel (gas oil) is currently priced at approximately 95–108p per litre for standard commercial orders, depending on volume and location. Prices change daily with wholesale fuel markets. Get a live commercial quote for your area →
What is red diesel?
Red diesel. Formally known as gas oil or Class A2 gas oil. Is a rebated diesel fuel dyed red (using Gas Oil Red dye) to distinguish it from road diesel. The dye serves as a marker for HMRC enforcement: fuel in a vehicle's tank that tests positive for the red dye indicates the driver is illegally using a lower-taxed fuel on public roads.
Red diesel is chemically similar to road diesel but carries a much lower fuel duty rate because it is intended for off-road and stationary uses. It is also known as 35-second oil, referring to its viscosity classification, and is sometimes called tractor diesel or agricultural diesel in farming contexts.
Who can legally use red diesel?
Following significant rule changes in April 2022, the list of approved uses for red diesel was considerably narrowed. Many uses that were previously permitted were removed, with the aim of encouraging a switch to cleaner fuels. The current approved uses as of 2026 are:
- Agriculture, horticulture, and forestry: tractors, harvesting equipment, irrigation pumps, grain dryers
- Fishing vessels: commercial fishing boats
- Rail: licensed rail vehicles
- Heating and electricity generation for non-commercial premises: industrial and commercial static heating
- Off-road vehicles and machinery not used commercially: private use vehicles on private land
- Traveller community and caravans: within specific conditions
From April 2022, the following sectors lost the right to use red diesel and must now use white (taxed) diesel or a renewable alternative: construction, manufacturing, haulage and logistics, data centres, marine leisure (pleasure craft), airports. If your business was previously using red diesel in any of these sectors, using it now is a criminal offence. HMRC enforcement is active.
Red diesel vs HVO, the alternative
For sectors that lost red diesel entitlement in 2022, HVO (Hydrotreated Vegetable Oil) has emerged as the primary alternative. HVO is a renewable fuel with similar performance to red diesel, approved for use in the same engines without modification, and qualifying as a sustainable fuel for ESG reporting purposes.
HVO does not carry a rebate. It is taxed at the same rate as road diesel, but it currently qualifies for RTFO (Renewable Transport Fuel Obligation) certificates, which can reduce the effective cost. For construction and manufacturing sectors, many major contractors now specify HVO for on-site plant as part of net-zero commitments. See our commercial fuel comparison page for current HVO pricing.
Current red diesel prices. What affects the cost
Red diesel prices follow the same drivers as kerosene: global crude oil markets (primarily Brent crude), the GBP/USD exchange rate, and domestic supply-demand dynamics. Commercial buyers purchasing in larger volumes typically pay less per litre than smaller orders.
| Volume | Typical price range (May 2026) | Indicative cost ex VAT |
|---|---|---|
| 500–1,000L | 102–108p/L | £510–£1,080 |
| 2,500–5,000L | 98–104p/L | £2,450–£5,200 |
| 10,000–25,000L | 94–100p/L | £9,400–£25,000 |
| Contract pricing (50,000L+) | Negotiated | Contact suppliers directly |
Prices ex 20% VAT. VAT-registered businesses can reclaim. Prices indicative: get a live quote for your postcode.
VAT on red diesel
Gas oil for most commercial uses is subject to 20% standard rate VAT. VAT-registered businesses can reclaim this as input tax on their VAT return, effectively making the net cost the ex-VAT price. Businesses not registered for VAT (typically those with turnover below £90,000) pay the full 20% with no recovery.
The exception is gas oil used for domestic heating, if a business is using gas oil specifically and solely for space heating of a building, the 5% reduced rate may apply in some circumstances. This is a complex area; consult your accountant if you think it may apply to you.
Fuel duty on red diesel
Red diesel currently carries a fuel duty rate of 11.14p per litre, compared to 52.95p per litre for road diesel. This significant differential is the source of its price advantage for eligible users, and the reason HMRC enforces eligibility rules strictly through dip testing of vehicle fuel tanks.
How to find the cheapest red diesel supplier
Unlike domestic kerosene, there is no widely available real-time price comparison tool for commercial gas oil. Prices are typically negotiated directly with distributors and depend on:
- Your location and distance from the nearest depot
- Order volume and frequency
- Whether you have account terms (30/60 days) or pay on delivery
- Whether you have on-site storage or need a bowser
The most effective approach is to get quotes from at least three suppliers in your area. Our commercial fuel page lists the main national and regional gas oil distributors with direct links to request quotes.
Compare gas oil suppliers. Enter your postcode on our commercial fuel page.
Storing red diesel. Regulations
Red diesel storage is governed by the Control of Pollution (Oil Storage) Regulations. The key requirements for above-ground storage are:
- Secondary containment (bunding) capable of holding 110% of the tank's capacity
- Tanks must be positioned away from watercourses and drains
- Fill and draw-off points must be within the bunded area
- Tanks over 200L must meet these requirements
For agricultural users, HMRC also requires records of red diesel purchases and use to be kept for 6 years to demonstrate legitimate usage.