A fuel additive composition includes: a) a reverse-micellar composition having an aqueous disperse phase that includes cerium dioxide nanoparticles in a continuous phase that includes a hydrocarbon liquid, a surfactant, and optionally a co-surfactant and b) a reverse micellar composition having an aqueous disperse phase that includes a cetane improver effective for improving engine power during fuel combustion. A method of making a cerium-containing fuel additive includes the steps of: a) providing a mixture of a nonpolar solvent, a surfactant, and a co-surfactant; and b) combining the mixture with an aqueous suspension of stabilized cerium dioxide nanoparticles.