In this study we have investigated the dielectric properties of diesel and gasoline in the Terahertz (THz) spectral region. We present frequency dependent absorption coefficients, refractive indices, and dielectric constants calculated from the transient measurements of the fuel oils between 0.1 and 1.1 THz. Observed weak absorption coefficient of fuel oils is explained by transient dipole moments induced by collisions between individual molecules. Fuel oils were modeled successfully with Debye model to investigate the relaxation dynamics after interaction with the electric field. Significant differences in relaxation times of molecules in diesel and gasoline are attributed to the differences in their intermolecular forces. Dispersion forces are much greater in diesel due to the longer hydrocarbon chains (C8-C40) compared to that (C4-C12) of the gasoline. This leads to a comparably faster relaxation right after THz electric field is applied. Clear differences in optical properties offer a simple yet effective way to discriminate fuel oils from each other by using THz spectroscopy without any danger of combustion or decomposition of the samples. Such an approach may also be used for the quality determination of either fuels. The study presents the great potential of THz spectroscopy to study very complex mixtures like fuel oils by the use of instantaneous THz wave/matter interactions and relaxation dynamics of the constituent molecules.