Abstract: The world is going out on crisis of conventional petroleum fuels either due to their unavailability or their harmful effect to health and environment. Biodiesel has emerged as a potential alternative to petroleum diesel due to its chemical characteristics similar to petroleum diesel with less harmful environmental effects. Biodiesel is mixture of fatty acids alkyl esters derived from triglycerides present in oils and fats. The problem with biodiesel is its oxidative action on storage. On oxidation biodiesel molecules are transformed into peroxides which further breaks into acids, alcohols and esters. The extent of biodiesel oxidation is determined like Iodine value, oxidisability, structure Indices etc.