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4 cents a litre: When it’s worth buying the expensive petrol

E10 fuel nozzle at petrol station.
With petrol prices soaring, motorists are wondering how they can keep their fuel costs down. (Source: Getty)

With fuel prices now well above $2 a litre, many motorists will be looking for ways to cut costs on petrol.

For many drivers, this may mean shifting to a lower-cost fuel.

The cheapest fuel at your petrol station typically has ethanol in it, which is blended with normal unleaded petrol to make fuel.

Known as E10, this fuel appeared on the market in the 1990s as an environmentally friendly (more on this later) fuel alternative.


While generally cheaper, Sarah Roberts from engineering research group ABMARC pointed out that ethanol isn't as efficient as petroleum at creating energy, meaning you need to use more of it per kilometre.

So does this cancel out any savings you make buying the cheaper fuel?

As a general rule, Roberts said as long as the ethanol fuel is cheaper by more than 4 cents a litre, it’s worth filling up with the ethanol product.

“If it's two cents a litre less, I’d just use the straight petrol. If it's four cents or more, then you’re on the winning side,” she said.

Petrol prices vary but Roberts said ethanol fuels were typically much cheaper than non-ethanol varieties.

For example, she said in Sydney a few days ago the average price for E10 was $1.79 a litre and the average price for the 95 RON fuel was $1.94 litre, which is $0.15 difference.

But won’t E10 damage my engine?

Roberts said some people were missing out on cheaper fuel because they believed E10 was bad for their cars.

She said despite the common misconception, E10 fuel is actually fine for most modern cars.

That hasn’t always been the case. Back in the ‘90s, when E10 was first introduced, the fuel wasn’t compatible with most car engines.

Although cars have been manufactured to take E10 for the past 20 years, Roberts said E10’s reputation never fully recovered.

In NSW in particular, which has a minimum biofuel content mandate, Roberts said there’d been a swing towards premium fuels.

“People don't know that the issues with ethanol fuels really relate to older vehicles, they just know that they've always heard that it can be an issue,” she said.

If in doubt, refer to the car manufacturer for advice: this information should be on the fuel flap, in the owner’s manual or on the car manufacturer’s website.

Motorists can also check the Federal Chamber of Automotive Industries website to see if their car takes E10 fuel.

And is it really better for the environment?

Many consider ethanol fuel to be better for the environment because when made from agricultural sources, ethanol is a renewable fuel source.

According to the NSW government, including ethanol also increases the oxygen content, which results in a cleaner burn.

Although ethanol fuel contains a portion of ethanol made from renewable sources, some argue that we’re better off growing food on the available agricultural land than growing crops to fuel our cars.

Roberts said the ethanol fuels used in Australia, to her knowledge, had fairly robust green credentials and were made from waste products.

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