Study: E-fuel costs motorists

New research from an American University has labelled NSW's E10 unleaded fuel mandate a "debacle".

The state has been pushing for motorists to use the premium grade ethanol petrol because of concerns the regular E10 grade petrol could damage engines and reduce fuel efficiency.

Texas Tech University researchers Michael Noel and Travis Roach said this push has meant premium grade petrol has become the top seller. 

This potential scare-mongering has cost motorists in excess of 345 million, according to Professor Noel, part of the university's Department of Economics. The report found NSW drivers had a "significant aversion" to the ethanol blended product when in fact they didn't need to.

''In 2010, one out of every three consumers forced off regular switched to premium instead of E10. Now six out of 10 consumers are. It is costing more and more for less and less,'' Professor Noel said.

While greener driving has been promoted heavily in recent years, it has been suggested prices need to decrease for more motorists to change what fuel they use.

Green MP John Kaye said the government mandate was not a good option for green driving or for motorist's wallets.

''Motorists who had been using regular unleaded have been faced with the choice of a fuel they don't want and a fuel that is much more expensive,'' Dr Kaye said.

''While per litre it [the E10 price] looks better, you have to burn more of it to cover the same distance, and you get more air pollution and more CO2 emissions"

In 2007, the mandate was introduced at 2 per cent and now requires 6 per cent of all petrol sold in NSW to be ethanol-based.

Fleets managers that are conscious about fuel consumption and greener driving can install fleet management software which can produce reports and track fuel usage across all vehicles.