Fuel prices have been increasingly revised in the past few days, and have reached an all-time high. The hikes in petrol and diesel prices came after the lockdown was lifted and as of today, Petrol in Delhi cost Rs 79.76/ litre while Diesel costs Rs 79.88/ litre. This means, for the first time ever, diesel is more expensive than petrol in India.
High fuel prices are primarily due to various taxes that constitute more than half of the selling price. To break it down, the excise duty levied by the central government on Petrol and Diesel are Rs 32.98 & Rs 31.83 respectively. Further, a VAT of Rs 18.36 for Petrol & Rs 18.45 for Diesel is charged by the state government. Apart from these, a dealer commission is added to the fuel prices.
With Rising Diesel Prices, Should You Buy A Petrol or Diesel Car?
For time immemorial, there has been a debate on which car to buy, petrol or diesel? There were different preferences for different people, owing to a multitude of factors. Chief of them was fuel price. Earlier diesel used to be much cheaper than petrol. With the new prices, however, things have begun to change. As diesel has overshot petrol, many customers are now wary of purchasing a diesel-only vehicle.
We did an analysis of whether it makes sense to purchase a diesel car rather than a petrol car.
In theory, the chief differences or markers of dissimilarity between petrol and diesel cars are three; maintenance, efficiency, and cost. While the cost of diesel fuel itself was low, the cars were the opposite. Added to the high cost of diesel cars was the fact that they were high maintenance. Since the quality of diesel has been sub-standard, the vehicles required repetitive care thus making it a high maintenance one. However, in recent times, the quality has substantially improved, making this problem a bit better for users. The high-efficiency diesel cars definitely have an upper hand, especially when compared to their petrol alternatives, with a mileage difference of at least 4-7 km/l.
With the new prices, the cost of diesel has surpassed that of petrol, so this criterion has done a complete 180-degree flip. For the purpose of this analysis, we chose the Ford Ecosport as the subject of the experiment. As of June 24, petrol is priced in Delhi at Rs. 79.76/liter and for diesel costs Rs. 79.88/liter.
The difference between the on road prices of the petrol and diesel car, which is roughly about 1.5 Lakhs. For the base model of Ford Ecosport, the differences are pretty visible.
Ford Ecosport Ambiente 1.5L Petrol, Manual, 15.9 km/l– Rs 9.02 Lakh (On Road Price, New Delhi)
Trend 1.5L TDCi 1498 cc, Diesel, Manual, 21.7km/l – Rs 10.61 Lakh (On Road Price, New Delhi)
Most people use their cars to commute from home to office and back. commuting. If you live in Delhi-NCR, your daily average run would be around 50 km for weekdays per month, which is 50*20*12 = 12000 km annually. Add to it 3000 km for weekend runs, your annual running would come out to be 15000 km.
Let’s calculate the running cost now (Formula = Annual Kms/ Mileage * Fuel Cost)
Diesel Car– 15000kms/ 21.7 kmpl x 79.88 = Rs 55,217
Petrol Car- 15000kms/ 15.9 kmpl x 79.76 = Rs 75,245
Petrol – Diesel Difference = Rs 19, 974
Considering that you pay Rs 1.59 Lakh extra for procuring a diesel car, specifically for Ford Ecosport, it would take you at least 8 years just to recover the on-road price difference. And that too when we neglect the interest on the loan amount if any.
Thus it is abundantly clear that if you are planning to buy a car and have an annual running of less than 15000 km, choose a petrol variant. The extra lakh bucks you save can be used to buy a high-end safety equipment rich variant. And saving a little extra money never hurts!