Key Differences of Heating Oil, Off-Road Diesel Fuel & On-Road Diesel Fuel in Pennsylvania

A common question and misunderstanding that I get from customers all the time is with regard to the difference between heating oil, off-road diesel fuel and on-road diesel. Is there a difference? Yes. The differences between these fuels can have an impact on price, efficiency, taxes and even equipment failure. I am writing this as it pertains solely to the State of Pennsylvania and for each individual fuel.

Heating Oil – Heating oil is a dyed fuel and contains a sulfur content of 2,000ppm (parts per million). Pennsylvania is the only State in the Northeast Region that has not yet voted on or enacted legislation to reduce the sulfur content of Heating Oil to 15ppm. Most States in the Northeast, if they have not done so already, have paved the way for a reduction in Sulfur content of Heating Oil either in stages or all at once. Most States already have a Heating Oil spec with a minimum Sulfur content of <500ppm (Low Sulfur) and many are already at 15ppm (Ultra-Low Sulfur) maximum that may or may not contain a BIOHEAT® component to it. Currently Pennsylvania is scheduled to reduce sulfur content in Heating Oil by July 1st, 2016, however there are many political hurdles ahead for this to happen. Virtually all state, local and independent dealers in Pennsylvania are in favor of moving the spec of heating oil, sooner rather than later, to the Ultra-Low Sulfur spec (<15ppm) with a minimum 2% Bio Component to it. There are a variety of reasons for wanting legislation to do this, including, but not limited to; moving the state into commonality with surrounding commonwealths, decreasing our dependence on foreign oil by using a Bio component, and increasing the efficiency of heating equipment due to the lower sulfur content.

Off-Road Diesel Fuel or Ultra-Low Sulfur Dyed Diesel Fuel (There are many acronyms for Off-Road Diesel Fuel, such as Dyed Ultra Low Sulfur Diesel Fuel and Non-Road Locomotive Marine to name a few. To keep the article uniform, we will refer to it as Off-Road Diesel Fuel) is not the same fuel as heating oil. Even though Heating Oil and Off-Road Diesel Fuel are the same color, red (the red dye in the fuel is used to distinguish for tax purposes), they are not the same fuel. Off-Road Diesel Fuel in Pennsylvania is an Ultra-Low Sulfur fuel, meaning it is <15ppm Sulfur content. This is the key to the difference between the two fuels. Construction equipment, farming machinery and vehicles built after 2007 were mandated by the U.S. Government, under jurisdiction of the EPA, to only be able to run on Off-Road Diesel Fuel for reduction of emissions. Using a High Sulfur fuel (I.e. Heating Oil) is also illegal in equipment built prior to 2007 and violation can result in very substantial fines and even jail time. Believe it or not this is checked randomly and frequently by authorities. Furthermore, using High Sulfur fuel in 2007 or newer model year engines, will not only ruin the engine, it will void any and all warranties on the equipment. Please note that Off-Road Diesel Fuel can be used as a substitute for heating oil. However, heating oil cannot be used in applications that require Off-Road Diesel for the reasons mentioned above. The hope for dealers is that both Heating Oil and Off-Road Diesel Fuel will be the same fuel in the near future and confusion between the fuels will be eliminated. Off-Road Diesel Fuel where it can be used for tax exempt purposes, such as school buses and by municipalities, should not void any warranty on the equipment. Dye makes no performance difference and does not affect the equipment. However, please check with the manufacturer before use to ensure this is the case, as some manufactures have used this to avoid paying warranty claims in the past. It is very advantageous for boroughs and municipalities to use NRLM because they will not have to pay taxes on the fuel upon delivery.

On-Road Diesel Fuel – On-Road Diesel Fuel is clear or has the appearance of a light greenish hue. On-Road Diesel Fuel is mandated by the State to have a minimum 2% Bio-Diesel blend and have an Ultra-Low Sulfur content <15ppm. On-Road Diesel Fuel presently contains $.8879 per gallon tax and on January 1, 2017 it will increase to $.9879 per gallon, the highest in the country. Some Boroughs and Municipalities use On-Road Diesel fuel for their vehicles even though it is not required. They are allowed to submit a tax refund at the end of the year to reclaim the tax on the fuel if they are indeed using it.

In closing, many people have a misconception about Bio-Diesel Fuel as well. To clarify, Bio-Diesel or BIOHEAT® is blended with biodegradable organic materials such as soybean oil. It is a domestically produced, soy-based fuel that helps to support our nation’s farmers and reduce our dependence on foreign oil. It is extremely clean burning and has the highest BTU content of any alternative fuel. It is not produced like Ethanol, where it takes food out of the food chain. It is actually a bi-product in the normal process of soy beans. It can be made from a variety of other sources as well, such as left over cooking oil and grease, linseed oil, coconut oil and coffee beans to name a few.

Kevin Steele
Vice-President
H.B. Steele & Son, Inc.