NRMA Motoring Blog

As recently as six months ago, one of the main incentives for buying a diesel vehicle was the perceived savings on fuel compared to a vehicle using unleaded petrol. But now it’s not uncommon to see the price of diesel up to 25 cents more than regular unleaded, leaving many owners of private diesel vehicles wondering if it was all worth it.

Several factors have contributed to the diesel price rise.

The main reason for diesel being consistently more expensive than standard unleaded petrol is that most diesel is sold under contract to fleet operators, mainly for heavy vehicles. This means the volume sold at your local service station is low, leaving retailers little incentive to discount.

Also previous Government regulations allowed diesel to contain 500 particles per million of sulphur. This has recently been adjusted to allow only 50ppm resulting in the production costs of diesel and unleaded petrol being quite similar.

Diesel prices are also kept high by demand in Asia, where most transport uses diesel.

Many Australians holidaying in New Zealand come back wondering why diesel is significantly cheaper there than it is here. However, Trans-Tasman diesel prices cannot be compared, as diesel in NZ is not taxed at the point of sale. Rather, diesel vehicle owners are required to pay a Road User Charge (RUC) in distance travelled slots, making the actual cost of the journey much more expensive than it appears at the bowser.

Manufacturers and the Government may be pushing diesel as a ‘green’ alternative to petrol, but owners and potential buyers are probably questioning if diesel is indeed a fuel of the future.

What are your experiences with buying diesel? Do you still find it worth the money, despite the recent price rises?

Over the past four years ethanol has been making its way to our fuel distributors, being sold as E10. It is a colourless alcohol, the same as in alcoholic drinks and is manufactured from grain or sugar. The CSIRO has calculated that an E10 blend cuts overall greenhouse emissions by around 3 per cent. However it’s more costly than petrol to produce and requires special storage facilities. Testing shows that fuel consumption increases by 3-4 per cent when using an E10 blend.

10 per cent ethanol mixed with petrol should not affect the majority of vehicles on our roads. The motor industry’s website advises which cars can use E10, E5 or no ethanol at all. All vehicles manufactured before 1986 are recommended not to use ethanol.

Ethanol is currently rebated at the normal fuel excise, but the rebate will be phased out over 5 years from 2011, by which time the industry is expected to have reduced the costs of production.

What’s your experience with E10? Is your car cheaper to run overall and has E10 had any effect – good or not so good – on your car’s performance or reliability?

So you’ve done all your calculations and decided to convert your car to LPG like over 70,000 other Australians. It sounds good in theory and the government rebate of $2000 is a great help. The fuel figures show your savings in dollars will have your conversion paid off within a year or two depending on your vehicle and the mileage done. But have you got all the facts?

Environmental impact

The environment is another winner in the change you have made by lowering greenhouse emissions. The Australian Greenhouse Office website states that the mass of CO2 gas released of the exhaust pipe by the burning of one litre of fuel is:

• 2.3 kg for Petrol
• 1.5 kg for LPG.

LPG = Less kilometres per litre

You can expect a 20-30 per cent increase in gas consumption over petrol per kilometre because the lower energy content of gas requires more to be burned in the engine compared with petrol. For example, a six cylinder Commodore achieves 10.9 litres per 100 km on petrol compared to 16 litres per 100km when run on LPG.

Excise

There is no government excise until July 2011. But then the price of LPG will gradually rise over 5 years.

The excise will increase as follows:

• 1 July 2011 increase of 2.5%
• 1 July 2012 increase of 5.0%
• 1 July 2013 increase of 7.5%
• 1 July 2014 increase of 10.00%
• 1 July 2015 increase of 12.5%

In knowing all this, is or was a change to LPG worth it?

Do all the figures add up and, despite the cost savings, has your vehicle’s power and torque suffered? Is it less efficient when towing or carrying heavy loads, especially on long trips and going up hills?