What is the difference between gasoil and diesel?

Road diesel (ULSD — Ultra Low Sulfur Diesel) is a highly refined grade of gasoil meeting strict specifications for road vehicles: sulfur max 10 ppm (EN 590), cetane minimum 51, specific cold flow properties. Standard gasoil (0.1% sulfur grade, common in heating and industrial use) is the same distillation fraction but less stringently refined. In commodity markets, 'ICE Gasoil' trades at the 0.1% sulfur specification; road diesel is priced at a premium reflecting the extra refining cost of desulfurization.

What is ICE Gasoil futures?

ICE Gasoil is the principal European diesel/gasoil futures contract, traded on the Intercontinental Exchange (ICE) in London. Each contract is for 100 metric tonnes of gasoil (0.1% sulfur) delivered in Rotterdam (ARA). The ICE Gasoil price is the primary benchmark for European diesel and heating oil pricing — distillate futures spreads, physical supply contracts, and retail diesel prices all reference ICE Gasoil. It is also used by airlines as a proxy hedge for jet fuel.

What is the difference between red diesel and white diesel?

White diesel is standard road diesel (ULSD) sold at filling stations with full road excise duty paid. Red diesel is gas oil dyed with a red marker dye (Solvent Red 26/Solvent Red 164 in the EU and UK) to indicate it has not paid full road fuel duty. Red diesel is legal for use in agricultural machinery, construction equipment, boats, and heating boilers, but is illegal in road vehicles. Using red diesel in a road vehicle risks prosecution and large fines. In April 2022, the UK restricted red diesel use significantly, limiting it to agriculture, horticulture, forestry, fishing, and rail traction.

Gas Oil (Gasoil)

Q: What is gas oil (gasoil)?

Gas oil (also written gasoil, as one word in commodity markets) is the petroleum fraction produced in the middle of the crude oil distillation column, boiling between approximately 160°C and 380°C. It is the feedstock and close relative of road diesel, heating oil, and marine fuel. The name dates from the 19th century when it was used as a feedstock for gas-generation plants. In commodity markets, 'gasoil' refers specifically to the ICE Gasoil futures contract, which is the principal European pricing benchmark for diesel and heating oil.

The middle distillate fraction of crude oil — the product family that includes road diesel, heating oil, and marine fuel, and the basis for the most important European fuel price benchmark.

Definition

Gas oil (written as one word, gasoil, in international commodity markets) is the petroleum fraction produced from the middle section of the crude oil atmospheric distillation column, typically boiling between approximately 160°C and 380°C. It sits above the kerosene/jet fuel cut and below the heavier residual fuel oils.

Gas oil is a broad category that encompasses several commercially distinct products: road diesel, heating oil, marine gas oil, and industrial fuel. They share the same refinery origin but differ in sulfur content, cold flow properties, and the taxes and duties applied to them. The name originates in the 19th century, when this fraction was fed to gas-generation plants to produce town gas for lighting.

In energy commodity trading, "gasoil" specifically refers to the ICE Gasoil futures contract — the most liquid European distillate futures market and the pricing reference for diesel and heating oil across Europe and beyond. Understanding gasoil pricing is essential to understanding retail diesel prices; for context, see our guide to what makes up the price at the pump.

Gas oil grades: from standard to ultra-low sulfur

Grade	Sulfur content	Main use	Key standard
ICE Gasoil (0.1% S)	Max 1,000 ppm (0.1%)	European heating oil, industrial; futures benchmark	ICE contract spec
Road ULSD (Ultra Low Sulfur Diesel)	Max 10 ppm (0.001%)	All road vehicles in EU and UK	EN 590 (EU); ASTM D975 (US)
Marine Gas Oil (MGO)	Max 1,000 ppm (0.1%); max 100 ppm in ECA zones	Marine vessel engines	ISO 8217 DMA/DMX
Heating gas oil (red diesel UK)	Max 1,000 ppm; some markets allow higher	Agricultural, heating, off-road machinery	BS 2869 Class D (UK)
Very Low Sulfur Fuel Oil (VLSFO)	Max 5,000 ppm (0.5%)	Bunker fuel (marine) outside ECAs; blended product	ISO 8217 RMD/RME

The transition from high-sulfur to ultra-low-sulfur road diesel across Europe and North America was completed by 2009 (EU) and required substantial refinery investment in hydrodesulfurization units. For the refinery context, see our glossary entry on how refineries work.

ICE Gasoil: the European distillate benchmark

The ICE Gasoil futures contract (symbol GO) trades on the Intercontinental Exchange (ICE) in London. Contract specifications:

Quantity: 100 metric tonnes per contract
Delivery: FOB barges in Amsterdam-Rotterdam-Antwerp (ARA) area
Specification: Gas oil 0.1% sulfur (max), compliant with EN 590 limits on other parameters
Settlement: Physical delivery if held to expiry; most contracts financially settled
Pricing: USD per metric tonne

ICE Gasoil is the most liquid European energy futures contract after Brent crude. It is used for:

Hedging by oil distribution companies, airlines (proxy jet fuel hedge), and industrial fuel buyers
Pricing physical diesel and heating oil supply contracts across Europe
As the denominator in the gasoil crack spread (ICE Gasoil − Brent = refinery margin indicator for diesel)

The gasoil crack spread — the price of ICE Gasoil above Brent crude — is a key indicator of diesel and heating oil supply tightness. When the crack is wide, it signals that distillate supply is tight relative to crude; when narrow, distillates are ample. The crack widened dramatically in 2022 when Russian diesel exports were disrupted by sanctions and European demand remained strong.

Red diesel vs white diesel in the UK

In the UK, gas oil intended for non-road uses (agricultural machinery, heating boilers, construction plant) is dyed red with Solvent Red 26 or Solvent Red 164 — hence "red diesel." This distinguishes it from "white diesel" (road ULSD) which carries full fuel duty (~57.95p/litre).

Type	Colour	Duty	Legal uses
Road diesel (ULSD)	Clear / white	57.95p/litre (2026)	All road vehicles; any use
Red diesel (gas oil)	Red-dyed	Reduced / rebated rate (~11.14p/litre)	Agriculture, horticulture, forestry, fishing, rail, heating, static generators

2022 red diesel restriction
In April 2022, HMRC significantly restricted red diesel eligibility, removing entitlement for most construction and mining equipment, golf courses, and commercial hospitality. The policy aimed to reduce the tax advantage of these sectors and encourage cleaner alternatives. Agriculture, horticulture, forestry, and fishing retained eligibility.

How gasoil pricing connects to retail diesel pump prices

The retail diesel pump price in the UK and Europe is built on the ICE Gasoil spot price as the foundation:

ICE Gasoil spot: The wholesale price signal (~$600–750/tonne in 2026)
ULSD premium: Additional cost to refine to max 10 ppm sulfur vs 0.1% gasoil spec (~$5–15/tonne)
ARA→UK logistics: Tanker freight, storage, terminal fees
Fuel duty: 57.95p/litre (UK 2026, fixed)
Retail margin: 4–8p/litre
VAT: 20% on total including duty
Pump price: ~145–150p/litre (2026)

Movements in ICE Gasoil drive wholesale diesel price changes; these transmit to retail over 2–6 weeks. For the full explanation of this lag, see our guide on oil price to pump price transmission. For live diesel prices globally, use the fuel price explorer.

For comparison of gasoil used in home heating (where no road duty applies) versus road diesel, see our guide to road fuel vs home heating oil.

What is gas oil and how does gasoil vs diesel differ?

What is gas oil? Gas oil (written as one word "gasoil" in commodity trading) is the middle distillate fraction from crude oil refining, with a boiling range of approximately 160-380 degrees C. The gasoil vs diesel distinction is primarily about refining specification: road diesel (ULSD) is a highly refined grade of gasoil meeting strict specifications (max 10 ppm sulphur under EN 590, minimum 51 cetane), while standard gasoil used for heating and industrial purposes is less stringently refined. In commodity markets, "ICE Gasoil" is the principal European diesel pricing benchmark. The U.S. EIA diesel fuel explainer covers the American equivalent (ULSD futures on NYMEX), and the IEA's oil product analysis tracks global gasoil demand by sector.

In the UK, the practical gasoil vs diesel distinction also involves tax treatment: "white diesel" is standard road diesel with full excise duty paid, while "red diesel" (gas oil dyed red) has historically carried a much lower duty rate for off-road agricultural and construction use. Since April 2022, the UK restricted red diesel eligibility significantly. The UK government's fuels guidance details the current rules, and the European Commission's energy taxation pages explain how EU member states apply differentiated duty rates to road diesel versus heating gasoil.

Frequently asked questions

What is gas oil (gasoil)? Gas oil is the middle distillate petroleum fraction boiling between ~160°C and 380°C in crude distillation. It is the product family encompassing road diesel, heating oil, marine gas oil, and red diesel. In commodity markets "gasoil" refers specifically to the ICE Gasoil futures contract — the principal European diesel/heating oil price benchmark.: Gas oil is the middle distillate petroleum fraction boiling between ~160°C and 380°C in crude distillation. It is the product family encompassing road diesel, heating oil, marine gas oil, and red diesel. In commodity markets "gasoil" refers specifically to the ICE Gasoil futures contract — the principal European diesel/heating oil price benchmark.
What is the difference between gasoil and diesel? Road diesel (ULSD) is a highly refined grade of gasoil with max 10 ppm sulfur (EN 590). Standard gasoil (ICE contract spec: max 0.1% / 1,000 ppm sulfur) is less stringently refined. Road diesel carries the extra cost of deep desulfurization plus road excise duty. In commodity markets, road diesel trades at a premium to ICE Gasoil reflecting these costs.: Road diesel (ULSD) is a highly refined grade of gasoil with max 10 ppm sulfur (EN 590). Standard gasoil (ICE contract spec: max 0.1% / 1,000 ppm sulfur) is less stringently refined. Road diesel carries the extra cost of deep desulfurization plus road excise duty. In commodity markets, road diesel trades at a premium to ICE Gasoil reflecting these costs.
What is ICE Gasoil futures? ICE Gasoil (ticker GO) is the most important European distillate futures contract, traded on ICE London. Contracts are for 100 metric tonnes of 0.1% sulfur gasoil delivered in the ARA region. It is the primary benchmark for European diesel and heating oil pricing and is used as a proxy hedge for jet fuel by airlines.: ICE Gasoil (ticker GO) is the most important European distillate futures contract, traded on ICE London. Contracts are for 100 metric tonnes of 0.1% sulfur gasoil delivered in the ARA region. It is the primary benchmark for European diesel and heating oil pricing and is used as a proxy hedge for jet fuel by airlines.
What is the difference between red diesel and white diesel? White diesel is road ULSD with full excise duty paid. Red diesel is gas oil dyed red to indicate it has paid only the reduced rebated duty rate — legal for agriculture, horticulture, forestry, fishing, rail, and heating boilers in the UK, but illegal in road vehicles. Using red diesel in a road vehicle is a serious tax offence.: White diesel is road ULSD with full excise duty paid. Red diesel is gas oil dyed red to indicate it has paid only the reduced rebated duty rate — legal for agriculture, horticulture, forestry, fishing, rail, and heating boilers in the UK, but illegal in road vehicles. Using red diesel in a road vehicle is a serious tax offence.