Comparing Gas Oil vs Industrial Fuel Oil When it comes to fueling industrial and commercial operations in the United Kingdom, two terms frequently surface: gas oil and industrial fuel oil. While both serve essential purposes in powering machinery, heating systems, and backup generators, they differ significantly in composition, use cases, taxation, and environmental impact.
What is Gas Oil? Gas oil, commonly referred to in the UK as red diesel, is a middle distillate fuel derived during the refining of crude oil. It shares a similar composition to road diesel (white diesel), but it is dyed red to indicate its lower duty (tax rate) and to prevent illegal use in road vehicles.
Key Characteristics of Gas Oil:
Sulphur Content: Modern UK gas oil is typically low sulphur (10 ppm or below) due to EU directives.
Applications:
Non-road mobile machinery (NRMM), such as tractors, bulldozers, and construction vehicles.
Industrial heating systems and furnaces.
Backup generators.
Taxation: Beneficial duty rate, but strictly regulated under HMRC guidelines.
Appearance: Dyed red for legal identification.
What is Industrial Fuel Oil? Industrial fuel oil, also known as heavy fuel oil (HFO) or residual fuel oil, is a viscous, thick oil that is left behind after lighter fuels like petrol, diesel, and kerosene have been extracted during refining. It’s heavier and often requires pre-heating before use.
Key Characteristics of Industrial Fuel Oil:
High Viscosity: Requires heating systems to achieve usable fluidity.
Applications:
Power stations and large-scale industrial plants.
Marine engines in ships (commonly referred to as bunker fuel).
Furnaces requiring consistent, high-intensity heat.
Environmental Impact: Typically higher in sulphur unless treated.
Colour: Dark and tar-like in appearance.
Core Differences Between Gas Oil and Industrial Fuel Oil Feature
Gas Oil (Red Diesel)
Industrial Fuel Oil (HFO)
Viscosity
Low to moderate
High (requires pre-heating)
Usage
NRMM, heating, backup power
Power stations, marine, heavy industry
Sulphur Content
Low (10 ppm in UK)
Often high unless refined
Taxation
Reduced rate but tightly controlledIndustrial use, depends on volume & purpose
Environmental ImpactLower emissions profile
Higher emissions without treatment
Storage
Special heated tanks recommended
Standard tanks
Environmental and Regulatory Considerations in the UK For Gas Oil: The UK government has tightened the permissible usage of red diesel, especially since the April 2022 tax reform, which removed the entitlement to use red diesel for many industries including construction. This change was aimed at incentivising cleaner alternatives like HVO fuel and biofuels.
For Industrial Fuel Oil: The Industrial Emissions Directive (IED) and UK Clean Air Strategy impose strict limitations on emissions from plants burning heavy oils. Emphasis is placed on:
Sulphur reduction.
Emission control technologies.
Transitioning to low-carbon alternatives.
Efficiency and Energy Output In terms of energy density, industrial fuel oil packs a stronger punch:
Industrial fuel oil offers high BTU content per litre, ideal for continuous high-load operations.
Gas oil burns cleaner and is better suited for intermittent use and equipment with emission constraints.
However, efficiency isn’t just about power—it's about the cost of storage, maintenance, environmental levies, and fuel handling systems. Gas oil typically wins in ease of use, but HFO wins in bulk industrial scale.
Cost Comparison Cost is one of the most frequent deciding factors:
Gas Oil: Prices have risen due to red diesel reform, averaging £0.90 – £1.10 per litre as of 2025.
Industrial Fuel Oil: Generally cheaper per litre, but higher maintenance and handling costs due to its properties.
Bulk purchasers (especially in sectors like manufacturing or energy) often favour industrial fuel oil for its economy at scale, while agriculture and logistics still rely on gas oil due to equipment compatibility and infrastructure.
Choosing the Right Fuel for Your UK Operation When choosing between gas oil and industrial fuel oil, UK businesses must consider: 1. Legal Usage Restrictions: Post-2022 red diesel reforms affect eligibility. 2. Fuel Handling Capabilities: HFO requires sophisticated infrastructure. 3. Environmental Responsibility: Compliance with DEFRA, IED, and UK Clean Air regulations. 4. Long-term Operational Cost: Beyond price per litre, account for storage, treatment, and emissions costs. 5. Fuel Alternatives: Consider biofuels, HVO, or kerosene blends for cleaner-burning options.
Final Thoughts: Making an Informed Choice For UK industries, the decision between gas oil and industrial fuel oil hinges on a combination of regulation compliance, infrastructure readiness, and long-term cost strategy. While gas oil continues to serve lighter industrial machinery and heating systems efficiently, industrial fuel oil remains indispensable for high-volume, high-temperature applications. With sustainability targets and fuel reform policies becoming more stringent, transitioning to cleaner, more efficient fuels may soon become not just a choice—but a necessity. Understanding the nuanced differences between gas oil and industrial fuel oil is the first step in that journey.
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