A method of improving the efficiency of a diesel engine provided with a source of diesel fuel includes the steps of: a) adding to the diesel fuel a reverse-micellar composition having an aqueous first disperse phase that includes a free radical initiator and a first continuous phase that includes a first hydrocarbon liquid, a first surfactant, and optionally a co-surfactant, thereby producing a modified diesel fuel, and b) operating the engine, thereby combusting the modified diesel fuel. The efficiency of a diesel engine provided with a source of diesel fuel and a source of lubricating oil can also be improved by modifying the lubricating oil by the addition of a stabilized nanoparticulate composition of cerium dioxide. The efficiency of a diesel engine can also be improved by adding to the diesel fuel a reverse-micellar composition that includes an aqueous disperse phase containing boric acid or a borate salt.