The bark should be OK because it is quite protective.
Contact your Environmental Health Officer immediately and make them aware that 'land contamination' is going on in a 'residential area'. Keep samples, and ask that they take some. It may smell like petrol, but if I were to kill a plant, I'd use something dangerously stronger! I hope petrol is not just the dilutant!
I'd bite the bullet and try to talk with your neighbour. Make him aware that such pollution can carry a prison sentence and that you will sue for damages and danger to your health should he be responsible.