The most commonly sold fuels are the unleaded varieties: unleaded (ULP), premium unleaded (PULP) and ultra premium unleaded (UPULP).

Unleaded fuels carry a RON (Research Octane Number) rating. Put simply, RON determines petrol's 'anti-knock' quality or resistance to pre-ignition.

If you run your vehicle on low octane petrol you might notice a 'knocking', 'rattling' or 'pinging' sound which means the fuel is detonating instead of burning smoothly. This is not only a waste of energy; it may also damage your engine in the long run. Fuel with a higher octane number suitable for your vehicle's engine will eliminate knocking.

But NRMA Motoring & Services' Jack Haley says it's a widespread but misguided belief that if you use a high octane fuel your car's performance will automatically increase.

"You won't achieve any improved performance from using higher octane fuels unless your vehicle's engine is designed for them," he says.

If you are in any doubt, check your owners manual to find out what type of fuel your engine is designed for or call Motoring Advice on 13 11 22.

Unleaded (ULP)

ULP is classified as 91 RON. Locally produced vehicles, plus most Japanese cars, are designed to run on it and these don't generally benefit from premium or ultra premium petrol. Some pre-1986 cars, like the KC Laser and Mazda 323, can also use ULP.

Premium (PULP)

Premium brands carry a 95 or 96 RON rating. Most European cars are designed for PULP because it is the standard octane there.

Ultra Premium (UPULP)

A few vehicle models are optimised for 98 RON or UPULP. Some of these cars can run on lower octane fuels but they will drop a small amount of power.

Liquified Petroleum Gas (LPG)

LPG is made from butane and propane and is cheaper than petrol. If you like the idea of LPG, you have two options.

"You can go for a factory fitted model, such as the Ford Falcon, which is a dedicated LPG model," says Jack. "Or you can go for a 'bi-fuel' version. These retain their petrol systems, with the LPG usually added by an approved installer after the car is sold.

"The cost of modifying your existing vehicle can be high. You should also check with the manufacturer that your vehicle's engine is suitable for LPG but the Federal Government is now offering subsidies of $2000 for converting an existing vehicle."

Diesel

Mainly used for fleet cars, heavy vehicles, some 4WD and commercial vehicles and increasingly popular in passenger vehicles.

Commonwealth Fuel Quality Standards require diesel to have lower sulphur levels necessitating a more intensive refining process and increasingly popular in passenger vehicles.

Biodiesel is made from tallow, waste oil and oil crops such as canola. It is available at a limited number of service stations - all Caltex diesel in the Newcastle region contains 2 per cent biodiesel. If you intend to use biodiesel you should check with your dealer to ensure your vehicle is suitable for it and in which concentration, and with your fuel supplier to ensure that the fuel complies with the National Fuel Standards. NRMA has received a minor number of reports of fuel waxing in colder regions of NSW and blocking fuel filters, which may indicate the fuel does not meet these Standards.

The NSW Government is legislating at the time of writing to require all diesel to contain 2 per cent biodiesel up to 2011 and 5 per cent from 2012 onwards.

Ethanol blend

E10 (10 per cent ethanol in petrol) blends are now widespread and available in most service stations. The NSW Government has legislated to require a volume of ethanol to be sold equivalent to 4 per cent of all petrol sold during 2010, and 6 per cent in 2011. From 2011 all standard unleaded petrol must contain 10 per cent ethanol.

Most cars are suitable but if you are thinking of using it you should check your vehicle's suitability on the vehicle manufacturers' website.

Vehicles built before 1986 should not use any ethanol. This means from 2011 onwards, owners of pre-1986 light vehicles and most motorcycles of all manufacture dates, must use premium fuel without ethanol.

Ethanol can be produced from sugar cane, wheat, sorghum and other grains which contain carbohydrate. Most ethanol currently produced in NSW comes from wheat starch. The excise on ethanol is subsidised so it should be cheaper than petrol.

An E10 blend will increase fuel consumption by between 1 and 3.5 per cent, so motorists need to take into account the price at the pump. Motorists wishing to try E10 should check on the manufacturers website that their vehicle is suitable, then try a couple of tanks of E10. Ethanol has a solvent effect so, if you have an old vehicle that has deposits and water in the fuel tank and fuel lines, the first one or two tankfuls of E10 may cause these to loosen and deposit in the fuel filter and your vehicle may hesitate on acceleration or run roughly. You will have to change the fuel filter if this happens.

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