The only practicable cheap liquid fuel is mineral oil, better known as crude petroleum, though this is confined to too few localities for general displacement of coal, but in those localities is usually cheaper and more desirable than coal. It comes from oil wells drilled usually deep into the earth. When taken from the earth, this oil is refined before it can be safely used for fuel. This consists of subjecting it to two stages of distillation which causes it to give off in turn highly inflammable gases, gasolene, benzine, and naphtha; then kerosene, and gas-enriching oils, leaving a dark-colored viscous liquid residue which is used as fuel. Fuel oil must be strained and frequently is heated just before it is burned to increase its fluidity and prevent clogging the burners. It is sprayed by pressure into the furnace.

While all mineral oils consist of the same elements, carbon and hydrogen, the oils from different localities vary widely in the relative amounts of gasolene, kerosene, lubricating oil, and the more dense constituents forming the residue, due to the fact that carbon and hydrogen have a great variety of chemical combinations, and each of these combinations, or compounds, differs in volatility from the others. This accounts for the fact that some mineral oils have a large proportion of volatile oils and only a small amount of residue, while others have a large proportion of residue and need but little distillation to prepare them for fuel. The residue of mineral oils includes the heavier lubricating oils, vaseline, paraffin, and mineral pitch better known as asphalt or bitumen. Mineral oils contain more or less earthy impurities, including sulphur. It is not known from what sources mineral oil was produced in its natural deposits.

Of the refined oils, gasolene is much used as motor fuel, and kerosene has very limited use as an industrial fuel.

Alcohols are produced from fermentation and distillation of vegetable matter and make excellent fuels, but they are little used at present except in small quantity for special needs. They are considered superior to petroleum fuels for motors, but their production and development for this use is limited because of the extensive use gained by gasoline while it was very cheap.