Crude glycerol (CG) is a by-product formed during the trans-esterification reaction for biodiesel production. Although crude glycerol is considered a waste stream of the biodiesel industry, it can replace expensive carbon substrates required for lipid production by oleaginous micro-organisms. However, crude glycerol has several impurities, such as methanol, soap, triglycerides, fatty acids, salts and metals, which are created during the trans-esterification process and may affect the cellular metabolism involved in lipid synthesis. This review aims to critically present a variation in crude glycerol composition depending on trans-esterification process and impact of impurities present in the crude glycerol on the cell growth and lipid accumulation by oleaginous microbes. This study also draws comparison between purified and crude glycerol for lipid production. Several techniques for crude glycerol purification (chemical treatment, thermal treatment, membrane technology, ion-exchange chromatography and adsorption) have been presented and discussed with reference to cost and environmental effects.