Petrol or diesel, which fuel type should you choose?

We have been receiving a lot of queries on the fuel type to choose while buying a new car during our live chats every Wednesday. Buying trends are changing as the difference in petrol and diesel prices are hovering around the Rs 10 mark after the latest change in prices. With the help of this example, calculate your purchase knowing you have taken the right decision. 

Example – 

There are five factors to consider before choosing the fuel type for your car – car price, price of fuel, efficiency, mileage and years of ownership. Mileage is the most important factor of the calculation. You need to determine how much you will drive your car every year to get your calculations right.

There are a few things you need to note. Firstly, mileage calculation is based on ARAI figures. In the real world, your car will give a lower average, but this standardises the calculation as every ARAI figure is achieved under similar test conditions. Secondly, we are not considering your car's resale value. Resale value depends on usage and maintenance. That brings us to maintenance costs. Petrol cars are a bit cheaper to maintain but you cannot achieve at a tangible figure. Let's just say factor a small percentage into your final calculations in benefit of the petrol car.

For the study, we have chosen the Honda City. You can replace it with any other car, fill in the correct numbers and find out the right fuel type.

Table 1 - 

Calculate the amount spent on fuel – number of litres consumed (distance travelled/fuel efficiency) multiplied by the cost of fuel.

For 10,000km, number of litres consumed is - 

Petrol: 10000km/17.8kmpl = 561.79 litres 

Diesel: 10000km/26kmpl = 384.61 litres

Money spent on fuel – 

Petrol: 561.79 litres x 68.55 = Rs 38,510

Diesel: 384.61 litres x 58.97 = Rs 22,680

You save: Rs 15,830/year driving a diesel if you clock 10,000km per year

But remember, you have spent Rs 1.18 lakh more to purchase a diesel Honda City. It will take you about seven and a half years to recover that amount spent during purchase of the diesel variant over the petrol variant with 10,000km clocked per year.

Read on to find out about different mileage slabs...

Table 2 - 

Ideally, cars are replaced every three years so buying a diesel car makes more sense if you clock around 25,000km per year. If you plan to own and run the same car for longer, your mileage per year will be lower.

Make sure you choose the same variant for both the petrol and diesel versions. The price difference between a petrol and diesel variant will vary for each car. Official prices and ARAI certified efficiency figures are available on our website and also every manufacturer’s website. You can get the right price of fuel from the website of oil companies or at a nearby fuel station. Your phones have calculators. Do let us know in the comments box below about the car you’ve picked and your calculations.

Here’s the price of fuel as on September 01, 2014 in our four major metro cities at BPCL pumps to help you in your calculations –