Types of Fuel in Australia: A Simple Guide for Drivers
The world of fuel types can be confusing for many drivers, especially as car technology continues to evolve and fuel prices keep rising.
Whether you’re filling up your car for the first time or looking to switch to a more cost-effective option, understanding the different types of fuel in Australia can make a significant difference to your wallet.
In this guide, we’ll break down everything you need to know about fuel types, including which are the most fuel-efficient and how a novated lease with Novated Finance Australia can help you save money in the long run.
What Are the Different Fuel Types in Australia?
Australia is home to a variety of fuel options, from the standard unleaded petrol to newer options like LPG and electric.
Each fuel type has its pros and cons, and the one you choose can impact both your vehicle’s performance and your fuel expenses. Understanding the different fuel options available can help you make an informed decision on which one is best suited to your needs.
1. Unleaded Petrol (Regular and Premium)
Unleaded petrol is the most common fuel type used by vehicles in Australia. It’s available in two main varieties: regular unleaded petrol (RON 91) and premium unleaded petrol (RON 95 and RON 98). This is one of the most popular types of gasoline used for cars in Australia.
Regular Unleaded Petrol (RON 91): This is the standard gasoline fuel and is suitable for most cars. It’s affordable and widely available across the country.
Premium Unleaded Petrol (RON 95 or RON 98): Premium gasoline has a higher octane rating, making it better suited for high-performance engines. It helps prevent knocking or pinging, providing smoother engine performance and improved fuel efficiency for certain vehicles.
Benefits:
Regular petrol is cheaper than premium.
Premium gasoline is ideal for cars that require high-octane fuel for better performance.
2. LPG (Liquid Petroleum Gas)
LPG is a cleaner, more affordable alternative to petrol and is commonly used in vehicles that are fitted with dual-fuel systems. While it’s not as widely used as petrol or diesel, LPG is popular among certain fleets and drivers who want to reduce their environmental impact.
Benefits:
Lower emissions compared to gasoline and diesel.
Cost-effective, especially in cities with access to LPG refuelling stations.
Drawbacks:
Limited refuelling infrastructure.
LPG vehicles require specific modifications, which can add to the initial cost.
3. Diesel
Diesel fuel is widely used in heavy-duty vehicles, trucks, and some cars, especially those used for long-distance driving. Diesel engines are known for their fuel efficiency and durability. They tend to offer better fuel economy than petrol engines, making them ideal for those who need to drive long distances regularly.
Benefits:
Better fuel economy for long-distance driving.
More torque which is beneficial for towing and heavy-duty vehicles.
Drawbacks:
Diesel fuel is more expensive than petrol.
Diesel engines produce higher levels of nitrogen oxides (NOx) and particulate matter, which contribute to air pollution.
4. Electric Vehicles (EVs)
Electric vehicles (EVs) are the future of fuel-efficient cars. With the rise of electric cars, drivers now have an eco-friendly option to reduce fuel costs and carbon emissions. EVs are powered by rechargeable batteries, making them a great alternative to traditional petrol or diesel-powered cars.
Benefits:
No fuel costs, charged via electricity.
Zero emissions, which makes them the most environmentally friendly option.
EVs often come with incentives like FBT exemptions for electric cars.
Drawbacks:
Limited range compared to petrol and diesel vehicles.
Charging stations may not be as widespread in some areas.
5. Hybrid Vehicles
Hybrid vehicles combine both a petrol engine and an electric motor, providing drivers with the best of both worlds. Hybrids automatically switch between petrol and electric power depending on the driving conditions, improving fuel efficiency without the need for frequent recharging.
Benefits:
Excellent fuel efficiency, especially in urban environments.
Lower emissions than traditional petrol and diesel vehicles.
Drawbacks:
The initial purchase price is generally higher than a standard petrol vehicle.
Hybrid technology can be expensive to repair.
6. Ethanol and Biofuels
Ethanol and biofuels are alternative fuel sources derived from organic materials like corn or sugarcane. These fuels are often blended with petrol to create bio-blended fuels like E10 (10% ethanol and 90% petrol).
Benefits:
Biofuels are renewable and have lower emissions than traditional petrol and diesel.
E10 is widely available in Australia and is generally cheaper than pure petrol.
Drawbacks:
Some vehicles are not compatible with ethanol-blended fuels.
The environmental benefits can vary depending on how the biofuels are produced.
7. Compressed Natural Gas (CNG)
CNG is another alternative fuel option, mostly used for fleet vehicles or buses. It’s cheaper than petrol and diesel and produces fewer emissions, making it an attractive option for environmentally conscious drivers.
Benefits:
Lower fuel costs.
Clean-burning with lower emissions compared to traditional fuels.
Drawbacks:
Limited infrastructure for refuelling.
CNG-powered vehicles can have a higher initial cost.
How to Save on Fuel with a Novated Lease
Now that you know the different fuel types, let’s look at how you can save on fuel costs by choosing a novated lease through Novated Finance Australia.
A novated lease allows you to bundle your fuel costs, maintenance, insurance, and more into one regular payment, deducted directly from your pre-tax salary. This can lead to substantial savings over time.
FBT on petrol and diesel vehicles is usually paid by the employee through the employee contribution method, but the great news on electric vehicles is that this is exempt, saving you even more money through a novated lease.
If you’re looking to save on fuel costs, Novated Finance Australia offers a great solution with novated leases.
Ready to drive a fuel-efficient car and save money on fuel? Get a quote today and let us show you how a novated lease can help you save more in 2025!
Frequently Asked Questions
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Yes! You can use a novated lease for most vehicles, including petrol, diesel, and electric vehicles. At Novated Finance Australia, we help you choose the best fuel-efficient cars for your needs.
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A novated lease allows you to save on fuel, maintenance, and taxes. The savings depend on your car choice, fuel efficiency, and how much you drive.
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Yes, electric vehicles (EVs) are eligible for novated leases. In fact, EVs can offer even greater savings, especially with FBT exemptions for electric cars.