section_path: Measurements and pricing/Taxation
section_name: Taxation
paragraph_text: Taxation
  
  Diesel fuel is similar to heating oil, which is used in central heating. In Europe, the United States, and Canada, taxes on diesel fuel are higher than on heating oil due to the fuel tax, and in those areas, heating oil is marked with fuel dyes and trace chemicals to prevent and detect tax fraud. "Untaxed" diesel (sometimes called "off-road diesel" or "red diesel" due to its red dye) is available in some countries for use primarily in agricultural applications, such as fuel for tractors, recreational and utility vehicles or other noncommercial vehicles that do not use public roads. This fuel may have sulfur levels that exceed the limits for road use in some countries (e.g. US).
  
  This untaxed diesel is dyed red for identification, and using this untaxed diesel fuel for a typically taxed purpose (such as driving use), the user can be fined (e.g. US$10,000 in the US). In the United Kingdom, Belgium and the Netherlands, it is known as red diesel (or gas oil), and is also used in agricultural vehicles, home heating tanks, refrigeration units on vans/trucks which contain perishable items such as food and medicine and for marine craft. Diesel fuel, or marked gas oil is dyed green in the Republic of Ireland and Norway. The term "diesel-engined road vehicle" (DERV) is used in the UK as a synonym for unmarked road diesel fuel. In India, taxes on diesel fuel are lower than on petrol, as the majority of the transportation for grain and other essential commodities across the country runs on diesel.
  
  Taxes on biodiesel in the US vary between states. Some states (Texas, for example) have no tax on biodiesel and a reduced tax on biodiesel blends equivalent to the amount of biodiesel in the blend, so that B20 fuel is taxed 20% less than pure petrodiesel. Other states, such as North Carolina, tax biodiesel (in any blended configuration) the same as petrodiesel, although they have introduced new incentives to producers and users of all biofuels.