Some kerosene is dyed red. The reason is that kerosene isn't taxed like other fuels because it isn't used primarily for transportation. The thing is that large semi trucks can run on kerosene because it is very close to diesel fuel. In fact, in the winter, a diesel is mixed with kerosene to keep it flowing better. Evidently some truck operators shaved costs by running tax free kerosene. To combat this, the government made it so that the kerosene was dyed red so that the truck owners could be caught. The red color stands for non taxable fuel and, if you get caught with it, you are going to be in some trouble.
People claim that the red dye makes the kerosene not burn as well and creates more odors. That is why it is best to find the K-1 clear. It is more pure and works better. In most areas, you can purchase the red dyed or the clear. You should steer clear of the red dye and go for the clear K-1.