Heating Oil Is Refined From Oil
Source: Stock photography (copyrighted)
Did You Know?
Heating oil gets dyed red.
The Internal Revenue Service requires heating oil and distillate fuel oils that are not for highway use to be marked with a red dye. The red color makes it clear that the product is tax-exempt and cannot legally be used as highway diesel.
Heating oil is a petroleum product used by many Americans, especially in the Northeast, to heat their homes. At refineries, crude oil is separated into different fuels including gasoline, jet fuel/kerosene, lubricating oil, heating oil, and diesel.
Heating oil and diesel fuel are closely related products called distillates. The main difference between the two fuels is that heating oil is allowed to contain more sulfur than diesel fuel.
In June 2006, the U.S. Environmental Protection Agency (EPA) reduced the allowable level of sulfur in highway diesel fuel by 97% as part of a program to reduce emissions from trucks and buses. The same standard is now being phased in for diesel fuel used by nonroad engines in construction, farming, mining and logging equipment, and by locomotives and commercial marine vessels.
Approximately 11 gallons of distillate are produced from each 42-gallon barrel of crude oil. Of these 11 gallons of distillate, less than 2 gallons are heating oil, and the other 9 are diesel fuel. Because diesel fuel requires additional processing to remove sulfur, it is more costly to produce than heating oil.
Historically, heating oil prices have fluctuated from year to year and month to month. They are generally higher during the winter months when demand for heating oil is higher.