Petrol and the alternatives

There are ways you can lighten the cost of fuel for both you and the environment.
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  • Updated:9 Dec 2008

01 .Introduction

Fuel price board

In brief

  • Petrol prices may fluctuate in the short term but will probably increase in the long term and it will be a long wait for more extensive public transport and better town planning that alleviates our dependence on private transport.
  • We compare the alternative fuels on offer and what you can save by fuel switching, downsizing and driving less.

Please note: this information was current as of December 2008 but is still a useful guide today.

Tips for sustainable living

Oil dependency

It’s been referred to as a double crisis; that oil supplies won’t last forever, especially if demand continues to increase, and the need to reduce greenhouse gas emissions to limit the impacts of global warming. And while the price of petrol fluctuates in the short term, it’s likely to increase considerably in the long term, because of the scarcity of oil and greater pollution controls.

Experts say we need major investment in better town planning to reduce the need for lots of long trips, infrastructure for public transport, better freight systems and improved motor vehicle technologies that include the use of renewable energy. Holden has just announced its first 85% ethanol-fuelled car will be produced from its Adelaide plant in 2010, however, you could be forgiven for yawning while you wait for all that to happen.

Even though the federal government’s proposed FuelWatch scheme was voted down in the Senate last November, you can still keep track of price information in most major cities through or if you're in WA.

Transparent fuel consumption

A new fuel consumption label was released on 1 October 2008. It shows urban and extra-urban (highway) driving figures in L/100km and a combined figure for greenhouse gas emissions in grams of CO2 per kilometre. You can also compare figures for different cars at


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Fuels made from plant and animal matter – biofuels – can reduce the amount of greenhouse gas emissions by vehicles because burning them releases only the carbon that was absorbed when growing. Biofuels aren’t new – Henry Ford’s first car ran on alcohol and Rudolf Diesel’s engine first fired with peanut oil. Two biofuels, ethanol and biodiesel, can be used in most existing motor vehicles and are relatively easy to handle and use

Can alternative fuels affect my warranty?

Don’t let the fear that switching fuels might invalidate your warranty put you off. Warranties cover workmanship rather than damage caused by fuel – that’s the responsibility of the fuel supplier and fuels have to meet Australian standards to be sold at a service station. Ensure that the fuel type will suit your vehicle – but don’t just assume it won’t – visit to check or ask your manufacturer directly.

What are the sources of biofuels?

Each of the alternative liquid fuels most commonly available in Australia has good and bad points, see below. The broader environmental impacts of ethanol and biodiesel depend very much on how they’re produced. Australia uses mostly residues from food, sugar and fibre crops to produce bioenergy, but there are some canola and cottonseed crops dedicated to biofuel. It would be useful to have independent certification of the environmental performance of the fuels.

In New Zealand, the Energy Efficiency and Conservation Authority is developing a sustainability mark for biofuels so consumers can identify those that are produced sustainably.No single fuel type can provide enough to cover our current demand, so we probably need a combination of solutions, as well as reduced fuel dependence.

Palm oil

Some critics attack biodiesel because it can be sourced from palm oil. Increased production of palm oil is causing deforestation in places such as Indonesia. But independent sustainability analysts Worldwatch Institute says less than 1% of palm oil goes towards biodiesel, and the real demand for palm oil is from food, cosmetics and industrial uses.

Are the alternatives any good?

Ethanol (E10)

An alcohol usually produced by fermenting sugars from plants such as sugar cane, wheat and corn.

Good points

  • Made from many sources of renewable materials, including waste products such as sorghum stems, spent grain or sugar cane.
  • Reduces reliance on non-renewable oil.
  • Lower CO2 emissions than petrol, when production and use are considered.
  • Generally produces less local air pollution than petrol.
  • Safe to use in most new cars at concentrations in petrol of up to 10%. Many new cars have an “e10 suitable” sticker near the fuel filler.
  • Fuel excise on the ethanol component of the product negated by a government subsidy until 2011.

Bad points

  • Pure ethanol has lower energy content than petrol (67%), which means you travel a shorter distance on the same size tank of fuel.
  • Can compete with other crops for land use and therefore raise food prices, which harms poorer consumers in developing countries for whom food is a higher proportion of their expenditure.
  • Can damage the quality and biodiversity of the local environment through clearing of native vegetation, monoculture production and introducing invasive species.
  • Shouldn’t be used on some older vehicles; check the list of suitable cars at
  • If produced with artificial fertilisers and transported a long way, energy return and greenhouse benefits can be low or negative.
  • Minor modifications required to run a vehicle on pure ethanol – only E10 is sold in Australia.
  • Limited availability: only a few hundred outlets.

Biodiesel (B20)

Produced from vegetable and/or animal oil. B20 is more commonly sold than pure biodiesel – it’s a blend of 20% biodiesel and 80% mineral diesel.

Good points

  • Made from many sources of renewable materials, including used cooking oil.
  • Reduces reliance on non-renewable oil.
  • Significantly lower CO2 emissions than diesel, when production and use are considered.
  • Biodegradable and non-toxic.
  • Generally produces much less local air pollution than diesel.
  • Pure biodiesel can be used in unmodified diesel engines or it can be mixed with regular diesel.
  • If made from agricultural or cooking residues it’s cheaper than if made from specially grown sources, uses less land and water and has better CO2 performance.
  • Fuel excise on the biodiesel component of the product fully negated by a government grant until 2011.

Bad points

  • Pure biodiesel has lower energy content than diesel (86%), which means you travel a shorter distance on the same size fuel tank.
  • Can compete with other crops for land use and raise food prices, which harms poorer consumers in developing countries for whom food is a higher proportion of their expenditure.
  • Can damage the quality and biodiversity of the local environment via clearing of native vegetation, monoculture production and introducing invasive species.
  • If produced with artificial fertilisers and transported a long way, energy return and greenhouse benefits can be low or negative.
  • Emits higher quantities of nitrogen oxides than diesel.
  • Becomes less fluid in cold climates, so vehicle modification is required if using pure or high-proportion biodiesel blends.
  • Very limited consumer availability – only a few dozen outlets, mostly in SA, WA and some in NSW.

Liquid petroleum gas (LPG)

Extracted from natural gas or derived as a by-product of the petroleum industry. Car LPG is a blend of mainly propane and butane, and is not interchangeable with LPG for barbecues.

Good points

  • Less local air pollution than petrol.
  • Some reduction in CO2 emissions compared with petrol for a given trip.
  • Petrol and diesel vehicles can be converted for LPG use. A government grant of $2000 is available for conversion of an existing private vehicle, or $1000 for the purchase of a vehicle manufactured with an LPG unit. (See or phone 132846 for more information).
  • Most conversions enable dual-fuel use; for example, petrol and LPG.
  • More than 3200 outlets – more than other alternative fuels.
  • Substantially cheaper per litre than regular petrol, because it requires minimal processing and is not subject to excise until 2011.

Bad points

  • Made from non-renewable resources.
  • Still emits considerable CO2.
  • Lower energy content than petrol, which means you travel a shorter distance on the same size tank of fuel. You need about 30% more LPG to go the same distance as petrol.
  • Requires expensive car conversion with an initial outlay of $2000-$4000, so it’s more attractive for higher-mileage vehicles. (See for accredited installers.)
  • Some new cars are built to use LPG only.
  • Some vehicles can’t be converted due to space limitations.
  • Need to consider not only the current price of LPG, but what it might cost in future.

If doing without a car is not an option, you don’t have to buy a “green” car to make a significant difference to your bills and environmental impact. To see which combination of the alternatives suits you, see the (see the Comparing cars and fuels table table)


Choosing the right car for your needs and driving style has a massive impact on your costs. If you just drive around town, you may not need a family car. Instead, the inexpensive two-seater SmartForTwo runs on petrol and is comparable on fuel and emissions to the much more expensive Prius.

Small cars can cost about 1/3 less to run than a 4WD, and cars such as the Hyundai Getz are cheap to buy so their whole-of-life costs are less than half that of a 4WD such as the Nissan Patrol. Could renting a 4WD suffice for the times you need off-road or towing capacity?

As well as car size, include fuel efficiency as a purchasing criteria. It’s easy; all new vehicles have to carry a fuel consumption label. If carrying seven people is what you need, buying a Kia Carnival instead of a Patrol can save you almost $7 every 100km on top of the $20,000+ you save at purchase.

The Toyota Corolla is a surprise pick in the Green Vehicle Guide. It’s a normal car that runs on regular unleaded fuel, has respectable fuel use and emissions figures, is relatively inexpensive to buy and is popular enough that you may be able to find a recent secondhand model.

Hybrid vehicles allow the use of two fuel sources. A car that can switch between LPG in one tank to petrol from another could be considered a hybrid. The classic hybrid, the Toyota Prius, combines a conventional petrol engine with a rechargeable electric motor to achieve better fuel economy.

The batteries recharge during normal driving when deceleration occurs. The Prius achieves tiny fuel consumption figures of 3.9L/100km. The catch, of course, is the high purchase price. This puts the relatively small Prius on par with many medium-sized passenger vehicles when it comes to whole-of-life costs.

Switch fuels

In 2007 only 2.5% of vehicles registered in Australia used alternative fuel systems. There can be significant barriers to switching, such as converting your car or buying a new car, and some alternative fuels can save you money in the short term but could be expensive for you and/or the environment in the longer term, so choose wisely.

The main benefits of E10 are environmental. Using E10 makes your vehicle 3% less efficient and as the fuel isn't 3% cheaper, it isn't a good deal. You end up paying slightly more — about 10 cents for every 100 km in a Corolla — for only a small greenhouse benefit.

To switch to biodiesel you need a diesel car. The most commonly available blend, B20, is slightly cheaper per litre and emits less greenhouse gases than regular diesel (see the Comparing cars and fuels table).

Even regular diesel, however, can be considerably cheaper to run than an equivalent petrol model: a diesel Nissan Patrol costs about $7 less than a petrol version for every 100 km and cuts greenhouse gas emissions by 30%. New diesel vehicles are generally much cleaner than in the past, because they are fitted with better soot filters. And the standard for regular diesel's sulphur concentration (which affects local air pollution ) will be improved from January 2009.

LPG currently costs less than half as much as petrol. In a Ford Falcon, despite fuel economy decreasing, this means a saving of more than $6 every 100 km. Even though this means that it's cheaper running an LPG Falcon than a Toyota Corolla, you can't feel so good about the greenhouse impact, because emissions are 40% higher than a Corolla’s and not even a significant improvement on a regular Falcon’s.

Drive smarter and less

Since 2003 we've seen a 10% increase in the number of passenger vehicles on Australian roads. And each car travels an average of 15,000 km a year. Of course governments need to take action on infrastructure, particularly public transport and better town planning, to eventually give you more transport options.

There's a need to conserve fuel, and we aren't all able to switch cars or fuel type in the short term. So remember that it's not only the car and the fuel, but also your driving behaviour that determines the costs you bear and the environmental impacts.

Driving smarter is part of the solution but given that about half the car trips in Australian cities are less than five kilometres we could all look at driving less often. Converting even a few of these trips to walking, cycling or public transport makes an impact.

If you only need a car occasionally, perhaps a car sharing scheme like Goget would suit you. Members can book a vehicle online or over the phone, for as long as you need it. They currently operate in Sydney, Melbourne, Adelaide, Brisbane and the Gold Coast.

‘Eco-driving’ saves you money

A car’s reported fuel consumption, in litres per 100km, is based on driving under standardised test conditions. But your driving style can increase that figure dramatically – and for every extra litre of petrol you use per 100km, it now costs $225 per year (based on a petrol price of $1.50 per litre and 15,000km per year). So any way you can reduce that is going to be good for your wallet.

“Eco-driving”, as it’s been termed, not only benefits the environment but saves you money and stress as well. To be an eco-driver you should:

  • Plan your trip well Try to achieve several tasks with the one trip.
  • Take your time You use less fuel if you drive a bit slower.
  • Shed the load Take unnecessary items out of the car and take off your roof rack when it’s not in use.
  • Keep it smooth Avoid hard braking and acceleration.
  • Switch off Ease up on the air conditioning, and stop the car and walk in to the fast food restaurant rather than idle in a long queue.
  • Maintain it Regularly check that the tyre pressure is right for your car and tyres, and have the car serviced.

Results table

Fuel type Fuel Use L/100km Fuel cost $/100 km CO2 kg/100 km Retail Price from $ Fuel cost $/100 km Fuel cost $/week
Toyota Prius Electric+Petrol 4.4 4.9 10.6 37,400 4.9 14.2
Smart Fortwo Petrol 4.7 5.3 11.2 19,990 5.3 15.2
Hyundai Getz Petrol 6.1 6.8 14.5 13,990 6.8 19.7
Volkswagen Golf Trendline Bio-diesel20 5.6 7.4 12.8 30,290 7.4 21.5
Volkswagen Golf Trendline Diesel 5.5 7.9 14.9 30,290 7.9 22.7
Toyota Corolla E10 7.5 8.2 16.8 20,990 8.2 23.8
Toyota Corolla Petrol 7.3 8.2 17.2 20,990 8.2 23.6
Ford FG Falcon G6 LPG (dedicated E-Gas) 14.9 9.4 24 41,390 9.4 27.1
Ford FG Falcon G6 Petrol 10.5 11.8 25.1 39,990 11.8 34
Kia Carnival Petrol 11 12.3 26.2 35,490 12.3 35.6
Nissan Patrol Bio-diesel20 10.9 14.6 24.6 58,990 14.6 42.1
Nissan Patrol Diesel 10.8 15.4 28.6 58,990 15.4 44.6
Nissan Patrol Petrol 17.2 19.3 40.8 61,990 19.3 55.6

Table notes

Vehicles are best performers for fuel economy within each vehicle model, listed as current models in the Green Vehicle guide as at 07/2008 (except the Ford Falcon, where the closest model to the dedicated E-gas option was chosen).

Retail prices are as at 08/2008 listed on manufacturer's websites.
Petrol and diesel costs calculated with the national average fuel price for the week ending 11/2008 from Australian Institute of Petroleum.
B20 price is the average price at 12/2008 from WA Fuelwatch.
LPG price is the major city average at 12/2008 from Motormouth.
E10 priced at 2.5c less than petrol – the average difference across major cities from Motormouth.

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