What is the difference between heating oil and diesel?
On the refinery side there is very little: EIA says “heating oil and diesel fuel are closely related petroleum products called distillates.” The differences that reach your invoice are the dye, the tax and where the law lets you burn the fuel. Winter is why people ask, but the same questions come up when a farm, a contractor or a facility manager wonders whether one tank can serve two jobs.
This page is a reference, not tax or legal advice. The figures are dated, and your state may add rules of its own.
How do ULSD, dyed ULSD, heating oil and kerosene compare?
Use the table to find the product on your ticket. “Varies” means the source does not give one national number and you should ask your supplier for the spec in writing.
| Clear ULSD | Dyed ULSD (off-road) | #2 heating oil | #1 fuel oil / kerosene | |
|---|---|---|---|---|
| Sulfur | 15 ppm or less | Most diesel sold for off-highway use is also ULSD (15 ppm or less, EIA); confirm the grade on the ticket | Varies by state. 15 ppm or less where ultra-low sulfur heating oil is required, such as New York (EIA, 2012) | Varies; read the spec on the ticket |
| Dye | None | Red | Red where it is not for highway use (EIA) | Varies; check the ticket |
| Federal excise tax | Charged: 24.4 cents per gallon federal, as of January 2026 (EIA) | Exempt from the federal excise tax for non-highway use (EIA); see the excise tax post for what remains payable | Same as dyed ULSD when dyed | Taxed like diesel when undyed; see the excise tax post |
| Allowed uses | Ask the supplier | Ask the supplier | Space heating and power generation (EIA glossary) | Space heaters, cook stoves, water heaters, wick lamps (EIA); #1 diesel is also a road fuel |
| Risk of mixing | Ask your supplier how a delivery into a tank that holds dyed fuel will be treated | Red-dyed fuels are illegal in vehicles that normally operate on roadways (EIA) | Same dye rule as dyed ULSD if it reaches a road vehicle | Changes the blend; see winter blends |
EIA’s glossary lists No. 1, No. 2 and No. 4 as grades of both diesel fuel and fuel oil, with the fuel oils “used primarily for space heating and electric power generation.” That is why one product name can sit on a road-fuel ticket and a furnace ticket.
Does heating oil have more sulfur than diesel?
Sometimes, and it depends on the state and the year. EIA’s Heating oil explained page defines ultra-low sulfur heating oil as heating oil with 15 parts per million of sulfur or less, and says New York required it in 2012. An EIA note dated April 18, 2012 says New York “will require that all heating oil used in the state contain less than 15 parts per million sulfur” and expected other northeastern states to follow.
Before that change, the benchmark allowed more. EIA wrote on May 10, 2013 that standard heating oil futures contracts had historically allowed “sulfur content up to 2,000 parts per million (0.2%),” and that the contract had moved to the ULSD specification. The sources here give no national sulfur figure for current heating oil, so this post gives none. If the sulfur number matters to your burner or your permit, get it from the supplier’s spec sheet for your state.
Can I use diesel instead of heating oil, or the other way around?
Legally, the direction matters more than the chemistry.
Clear diesel in a furnace or boiler: clear ULSD carries the road-fuel taxes in its price, so you pay 24.3 cents a gallon of federal excise tax that dyed heating oil does not. Whether any of it can be claimed back is a question for your tax adviser. Ask the burner’s manufacturer and your service company whether the burner and its warranty accept it. This page can’t say.
Heating oil or dyed diesel in a truck: EIA says “red-dyed fuels are illegal to use in vehicles that normally operate on roadways.” The penalties for dyed fuel on the road are covered in the federal excise tax post, and the temporary federal relief that applies to the fall of 2026 is in the dyed diesel order post. State rules are separate from both.
Dyed diesel for heating: dyed ULSD for off-road use is the same family of fuel as red-dyed heating oil. Whether a given delivery can legally go into a heating tank depends on how it was sold and your state, so ask the seller to put the intended use on the ticket.
What does the invoice look like for each?
The invoice differs mainly on one line: the federal road-fuel tax. EIA’s page on fuel taxes, with values “as of January 2026,” shows federal tax on diesel at 24.40 cents per gallon, made up of 24.3 cents of excise tax and 0.1 cent of Leaking Underground Storage Tank fee.
Say you take 1,000 gallons and the product price is a plainly illustrative $3.000000 per gallon before taxes. State and local taxes are left out.
| Line | Clear ULSD | Dyed fuel, tax-exempt use |
|---|---|---|
| Product, 1,000 gal at $3.000000 (illustrative) | $3,000.00 | $3,000.00 |
| Federal tax, 1,000 gal | $244.00 | See the excise tax post |
| Invoice total before state and local taxes | $3,244.00 | $3,000.00 plus any tax that applies |
The two products are not priced from the same starting point in practice, so do not read the $244 as the gap between two real quotes. It only shows the tax lines. Some suppliers show the tax as its own line and some fold it into the rate, which is covered in how the federal excise tax shows up on an invoice. If you compare quotes from the rack price up, make sure both quotes carry the same tax treatment.
What should I check on the ticket and bill of lading?
Check three things before the fuel goes into the tank:
- Product and dye status. The delivery ticket should name the product (ULSD, dyed ULSD, #2 heating oil, kerosene) and say whether it is dyed. If it says dyed and you ordered clear, or the reverse, call before the next draw.
- Agreement with the bill of lading. The bill of lading records what was loaded at the terminal; the ticket records what came off the truck. The product should match on both. How to read a fuel delivery ticket walks through the fields.
- The tank it went into. A mix-up is easiest to fix before the next draw. Read the dyed diesel entry for what the dye means on paper.
When is the ticket all you need?
If you have one site, one product and one dealer you already trust, the product line and dye status on the ticket answer most of the questions above. A home heating customer, a farm buying red diesel from the local co-op, or a facility with a single tank and a long-standing supplier is well served by that relationship. If you buy from more than one supplier, the dye and tax rules are the same: check that every ticket names the product and its dye status.