Who's fueling who?

With petrol prices sailing well past the buck-thirty mark (incidentally, further hikes are tipped between now and the Easter weekend) it’s hardly surprising a new breed -- actually, a couple of breeds -- of motorised fuel miser are infiltrating Australian roads.

What new breeds, you ask? Well, the parsimonious chariots we’re referring to are diesels, hybrids and those propelled by liquefied petroleum gas (aka LPG). The latter has been the fuel of choice of taxis and certain fleets for several years, but it’s now finding favour in the private car market, though still among a relatively small number of buyers. (See LPG Autogas's sponsored site for more information here.)

Diesel has long been regarded as smoky, smelly substance that’s dispensed by greasy bowsers that are routinely manhandled by truckies. But times are a changin’. A new generation of diesel car has emerged in recent times -- one that is smooth, refined and unhampered by the performance penalty that was the bane of its forefathers.

And the sales figures show that buyers are taking to compression-ignition (ie diesel) vehicles in increasing numbers. According to industry statistician VFACTS, YTD March 1578 diesel passenger cars were sold to private buyers compared with 877 for the same period last year. Add in non-private passenger car purchases and the total number is 2388 compared to 1263.

In other words, diesel passenger-car sales have close to doubled in the last 12 months. It’s a telling statistic, but this is just the beginning with a horde of new diesel-powered vehicles -- offered by manufacturers such as Jaguar, Fiat and Mazda -- yet to join the fray.

Hybrids cater to a more rarefied niche, as the sole representatives for now are the Toyota Prius and petrol-electric variant of the Honda Civic. These, too, are bought mainly by fleets.

DOLLARS AND SENSE?
But do hybrids and diesels make sound economic sense, or are they the wheeled equivalent of setting fire to a fistful of hundred-dollar bills?

Industry expert and CEO of SurePlan Australia, Tony Robinson, says it all boils down to how far you plan to drive your vehicle.

“If it’s the traditional three-year/75,000km lease or less then the additional cost in opting for an LPG or diesel option is hard to justify, even at today’s pricing,” he suggests.

Robinson says you have to buy such vehicles for other reasons, unless you’re doing in excess of 30,000km per year and plan to keep the car for an extended period.

So is Mr Robinson right or wrong? Let’s do a hypothetical case study by comparing a Toyota Camry Altise with a Prius. The latter costs about $10,000 more, but both cars offer similar levels of performance and accommodation.

Depending on driving style, you can expect the Prius to use around 4lt/100km less than the Camry. Basing the calculation on fuel costs alone and assuming fuel costs $1.30 a litre, this would mean you’d need to drive over 192,000km to recoup the ten-grand price premium.

So, a hybrid probably isn’t the smartest choice if your typical weekly driving regime consists only of dropping the kids to school, commuting to work and doing the shopping. Sydney taxi company Legion Cabs has recently added a Prius to its fleet, but it stands to benefit by flogging the car for 400,000km before pensioning it off.

What about diesels? Well, here there’s a more compelling argument, but only marginally so. Let’s compare a Volkswagen Golf 2.0 FSI Comfortline with a Golf 2.0 TDI (turbodiesel) Comfortline. Both are similarly equipped, have relatively similar performance, but the latter costs $2500 more, yet is more frugal (to the tune of around 2.5lt/100km).

Do the maths and you’ll work out that due to the extra cost of diesel you need to drive about 80,000km just to recoup the extra initial outlay. So, once again, you need to do the miles to justify choosing the diesel Golf on a fiscal basis.

Robinson says far better savings can be reaped by simply selecting a smaller vehicle than the one you might otherwise be inclined to buy.

RACV chief engineer-vehicles, Michael Case, concurs, saying: “An important message is to consider alternative fuels, but also to keep fuel costs in perspective relative to other purchasing criteria.

“Greater cost savings can be made by considering other factors such as vehicle price and depreciation in the process of model selection,” Case says.

NRMA vehicle policy specialist Jack Haley has clear views on the subject.

“Most vehicles sold in Australia are recommended to use 91 RON (standard unleaded) and will not improve their performance if operated on a higher octane fuel,” he says.

“Even where performance is enhanced, a rule of thumb is that each RON number gives a reduction of one per cent in fuel consumption (or a one per cent increase in power output),” says Haley. 

“Therefore one would expect a four per cent reduction in fuel consumption in moving from 91 to 95 octane, assuming the engine can take advantage of this. 

“If the price difference is more than four per cent it does not make economic sense to do it.  Similarly, using 98 RON in a vehicle recommended for 95 could result in a three per cent reduction in fuel consumption and the same qualification on cost difference applies.” 

Haley suggests vehicles should be operated on the fuel specified by the vehicle manufacturer in the owner’s handbook.

In the case of most European and some Japanese vehicles, the recommended fuel is 95 RON.  Haley says some of these vehicles can be operated on 91 RON ULP without a problem, with a small decrement in performance -- the owner’s manual will note if this is the case. 

A small number of vehicles, usually performance cars, are either specified to use 98 RON (ultra PULP) or will adjust their engine parameters to take advantage of the higher octane if operated on it -- again, the owner’s manual should be consulted

The RACV recently commissioned a laboratory study of what fuel consumption benefits may be gained from the use of premium grade fuels. The testing was designed to remove factors such as differences between test vehicles, test drivers or conditions to ensure that one fuel is directly compared to the other.

The results show that while there can be small fuel consumption improvements from using premium grade fuels, the higher cost at the pump means that motorists would pay more in the long run than by using regular unleaded (91 RON).

However, the testing program did not assess the claimed cleaning benefits of the branded 98 octane fuels. By removing deposits over time, the cleaning effects are claimed to improve fuel consumption and emissions.