Pet’rol’ v/s ‘Die’sel

Rohan, a resident of Mumbai wanted to buy a hatchback for his office commute and weekend family getaway. While he zeroed down on the Swift to suit his requirement; he was confused on which fuel option to opt for. While the office commute wasn’t much distant; he didn’t want the weekend getaways to cost dear. While this dilemma had been confusing the average Indian Car Buyer for long, the answer is much easier now. The Diesel is slowly losing its charm (rather competitive advantage) and petrol is strongly gaining acceptance due to the mentioned reasons –

  • Minimal Price Gap (Currently Diesel is priced Rs.48.33/ltr vis-a-vis Rs.59.68/ltr for Petrol)
  • Petrol Cars are easier and cheaper to maintain
  • Hefty difference in Petrol Variant On-Road prices v/s the Diesel counterpart
  • Better Drivability in city and Lighter Clutch on Petrol Cars
  • Lower Emissions in Petrol Cars
  • Easier availability of Automatic option in Petrol
  • The uncertainty of laws (who knows when Diesel cars can be banned!)

The statistics looks something like this:

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Maruti Swift Petrol v/s Diesel On-Road Price*

*prices referred from Carwale – Exshowroom Delhi

Hence, Rohan has to shell out Rs.1.34 Lakhs more if he opts for the diesel Swift (Vdi variant v/s similar spec Vxi). The cost difference will extrapolate even higher if the car is purchased on loan (interest amount being superior in this case). The cost saving in fuels would also not be considerable to recover the initial loss. Let us consider Rohan’s monthly travel to be 1500 kms (50 kms/day multiplied by 30 days); the average monthly fuel expense will work out to be –

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Rohan will end up saving Rs.2143/mth in Diesel car v/s the Petrol (Realistic <not ARAI> Mileage values are taken for calculation). Hence to recover the initial loss of Rs.1.34 Lakhs; Rohan will have to wait 5.23 years considering the above calculation! The waiting time will get even higher if interest costs are considered.

Hence, Rohan undoubtedly ends up opting the Petrol car as his purchase and similarly many other consumers are following this trend. The same is clearly evident in the sales graph this year – while sale of Diesel Passenger Vehicles degrew by 6.22%; Petrol Car Sales saw a resurgent growth of 15.27%. Petrol variants contributed to over 56% in FY16 and we expect the contribution to grow much stronger in FY17. The detailed chart highlighting the Fuel-wise contribution percentage –

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Source: ET

While the topic has been debatable for quite some time, India had always been a big market for small petrol cars. That’s why the Alto has been the numero uno selling car in the sub-continent and currently globally as well. But, the global sales trend has been varied across nations. We could find the consolidated list of best-sellers across the world here –

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Source: India Today

5 thoughts to “Pet’rol’ v/s ‘Die’sel”

  1. The above calculation is very much valid and a layman would completely agree with it, but every time I come across this calculation in different forums I put forward one single point…. On an average a car is replaced every 3-4 years in India. After 4 years owing to high resale value of few brands – In this case Maruti, 50% of initial investment is recoverable. The same can be verified at any of the online auto portal. So a gap of 1.34L reduces to just 70k when we take into account the higher resale value of Diesel Car vs Petrol Car. So now the payback period comes down to 2.5yrs…. and this coupled with even a minor increase in monthly kilometre running would further bring down the payback period. So why not Diesel Car? Happy enjoying a lower per kilometer running….

    1. You have a valid point Karan. But you have missed the petrol-diesel price fluctuation. If you take the data of 2012 – Petrol/ltr was costlier by Rs.25 than Diesel/ltr. The gap is way reduced as on date and Petrol currently costs only Rs.10-11/ltr than Diesel. If the same trend continues, the price gap will further reduce and obviously the per kilometer running costs won’t vary that much. Hence, we anticipate the trend in strengthened sales of petrol cars in future.

  2. Diesels are more fuel efficient than petrol cars. Even if cost of petrol and diesel become same, still operational cost of diesel car is cheaper than petrol. ,( cost per Km/ liter).

    1. Diesels are indeed a much fuel efficient option when compared to petrol. However, does paying the >Rs.1 Lakh price premium for a diesel car initially makes sense in long run?

  3. Good article, Simple theory you run more kms go for diesel, you run less kms go for petrol. I believe if you run 2000km per month both petrol and diesel options will give similar expenses all combined.

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