Premium petrol a waste of money, RACV research reveals

Fuelling up with premium unleaded petrol? You could be wasting your money.

Filling up with premium petrol may needlessly cost you hundreds of dollars extra on your annual fuel bill.

RACV research shows that buying the most expensive fuel, premium unleaded petrol (PULP) 98, adds an extra $239.40 a year to the average fuel bill, compared with using regular unleaded fuel, even though many cars get no benefit from the more expensive fuel. 

And, even more surprisingly, the research shows that buying the cheapest fuel, E10, works out almost $10 dearer over the year than regular unleaded fuel because, as this fuel is less energy efficient, you use more.

RACV senior vehicles engineer Nick Platt says that based on the average 14,000 kilometres travelled each year, Victorian motorists pay between $1776.60 and $2016 annually for fuel. 

He says that if a typical car using an unleaded fuel uses nine litres of fuel per 100 kilometres then the same car using E10 would use about 9.3 litres per 100 kilometres.

Based on this fuel economy, a motorist filling up with ULP 91 would have an annual fuel bill of $1776.60, based on the average fuel price for the last financial year. This is $8.29 less than the $1784.89 they would have spent filling up with E10. The same driver would have spent $1927.80 filling their car with premium unleaded (PULP) 95 and $2016 for PULP 98 over the same period. 

However RACV’s manager of vehicle engineering, Michael Case, warns that while many cars derive no benefit from more expensive fuels, some – particularly European models – need to run premium unleaded petrol because regular unleaded fuel and E10 may damage the engine and void the warranty.

“If a manufacturer specifies using PULP 95 or 98 then car owners must use premium petrol or risk engine damage,” he says. 

“The key to knowing what to use is the owner’s manual – it might ‘suggest’ using PULP 95 because it may improve performance but also state that it is also safe to use ULP 91. Then it’s up to you," he says.

"Based on VFACTs vehicle sales figures for 2019, RACV estimates only 20 per cent of all passenger cars sold require premium fuels," Nick adds. "VFACTs is compiled by the Federal Chamber of Automotive Industries (FCAI). This aggregated reporting is commonly known as VFACTs and is used to see the types of vehicles being purchased, trends, and brand volumes."

For motorists driving cars designed to run on regular unleaded fuel, paying the extra for premium fuel is often a waste of money because the vehicles are unable to take advantage of the properties of premium fuels.  

“Only some cars will benefit from using premium fuel, such as European-made models from car manufacturers such as Volkswagen, Peugeot, Fiat etc,” Nick explains. "This is because 91 RON, while available in Europe, is not widespread and is generally being phased out.

“For other cars, there will be no improved performance or potential economic benefit [lower fuel consumption] if they drive normally. Premium fuels do not contain more energy than regular petrol, they just allow higher-performance engine designs to be used. 

“When it comes to ethanol fuel, it is best to take advice from the manufacturer about whether it is suitable for your car.” 

Nick says although E10 was the cheapest at the pump in the last financial year, with an average price of 137 cents per litre, compared to 141 cents per litre for regular unleaded, a car needs more E10 fuel to cover the same distance as unleaded petrol.

“E10 has slightly less energy content which means you’ll burn more fuel for a given distance,” he says.