Petrol, diesel, CNG, LPG? Which one should you go for…

The steepest ever hike in prices of petrol on Wednesday led to the customary howls of protest across all quarters of the society and the usual defense of how rising crude prices had made this almost compulsory.

And equally it will lead to the question being asked whether it makes any sense at all to buy a petrol vehicle any more.

I did write about this last year and tried to make it simple for prospective buyers on the choice they ought to be making. It did get many eyeballs but at the same time a lot of pertinent questions were raised. This time around, I would try and answer in as lucid a manner as possible.

The difference between the price of diesel and petrol is now at an all time high, by far. At Rs 32 per litre, diesel finds itself in a favourable position like never before. At the same time though, the prices of diesel cars have also risen substantially over the last 1 year.

For example, in January one may get a new diesel car for only Rs 80,000 more as compared to its petrol counterpart. That difference today easily stands at over Rs 130,000. This excludes the huge discounts that petrol cars carry these days which makes the situation a little more complicated.

The grey area with diesel’s popularity, as pointed out by some readers, is that it demands more maintenance over sustained usage. That is true for age old diesel cars but so far there is little proof of it in new age diesel engines. What does it mean by new age engines?

The real diesel car demand began in earnest with the launch of Maruti Swift, which is now almost 5 years old (diesel version). I believe that is a good enough time period to review a car’s performance as far as durability is concerned. So far, there is little to suggest that a 5 year old Swift diesel has asked for any extra maintenance as compared to its petrol counterpart.

Ofcourse in some parts of the country the quality of diesel is a big question mark and that leads to unsavory experiences. For now we have to take it with a pinch of salt and grin and bear it. Such cases can only be exceptions. A diesel engine may still demand a little more money on maintenance by dint of its being heavy, and more complicated high compression machine but it cannot be such a big factor to alter the overall economics of owning a diesel car in a big way. The jury however, is still out on this and I shall stand corrected incase it happens to be the other way.

The scenario with CNG and LPG has not changed much. They remain cheap but at the same time their availability pan India is a big hindrance. In places where CNG is available like in Delhi NCR, Ahmedabad, Pune, Mumbai and some other cities like Lucknow, Agra and Kanpur, the demand for these vehicles is high. Sometimes as much as 30% of all cars sold in these cities is CNG. There are some safety parameters and the loss of boot space that linger in the minds of consumers. Some of it may have merit but overall and considering that manufacturers are now offering warranty on CNG fitment, safety is no longer that big an issue.

Coming down to the overall cost dynamics in the changed situation, petrol has clearly become a rich man’s fuel. With a per kilometer running cost of Rs 4.13, this is more than double that of diesel. CNG remains the cheapest fuel to run your car on, at just under Rs 1.42 per kilometer followed by diesel at 1.94. Considering that you drive on a average 30 kilometers every day, it would now take you barely 30 months to cover up the additional cost that you may be paying for a diesel car compared to a petrol car. In the case of CNG that is even lower at just under 2 years while for LPG it is also 30 months.

To extrapolate it further, in 5 years time, you would end up saving over Rs 60,000 on a diesel car and over Rs 93,000 on a CNG vehicle, give and take a few hundred rupees here and there. These calculations are based on some standard assumptions like the fuel economy of a petrol, diesel and CNG vehicle under test conditions as specified by government’s own agency Pune based ARAI. Indeed the fuel economy figures taken here are those supplied by ARAI. This may vary on actual road conditions but it is a common benchmark and it will not change the broad conclusions substantially.

For now, so long as diesel prices remain at the level they are, it is indeed a lot more attractive bet. But considering that it is also liable to change in future, CNG appears to be the cheapest if not the safest option.

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