In this blog i am trying to create a calculation sheet which can be used to figure out – if you go for a diesel car, when would you be able to recover the cost of purchasing the car – as to spending in petrol.
Government in india loves petrol. It is used generally by the middle class with small cars and 2 wheelers and who rarely vote. People who fall below the middle class mostly travel using public transport. And people who are above the middle class generally have long cars powered by diesel engines. The government finds it difficult to increase the price of diesel – due to the ripple effect it will cause in the price of food commodities and the overall inflation. So raising the price of petrol seems the only viable option – to cater to the loss due to subside on diesel and cooking gas – without effecting the government’s vote bank.
And ofcourse the amount of tax the government is able to make out of fuel is really good. How the tax amount is used – is a blind spot for the residents of india. We do not see any improvement in roads – jams are always there. It has been more than 60 years since independence and we still are struggling in providing the basic necessities like electricity and water to the general public. It seems valid that there should be a fine on the “government” for unable to accomplish what it has been promising for ages – food, clothes, electricity, water and home.
But lets focus on diesel cars. The new diesel cars from tata and fiat have really long maintenance schedules. Earlier older diesel engines need quick maintenance. Most petrol engines need a service in every 5K kms – or at max 10K kms. On the other hand diesel engines in tata and fiat need maintenance every 15K kms or once a year. This brings down the cost of ownership of diesel engines to a lot less.
Maintenance set aside, a simple table can be used to figure out how long it will take to recover the “extra” cost of diesel.
|1||Price per litre||71||41|
|3||rs per km||5.0714285714 (=B1/B2)||3.4166666667 (=C1/C2)|
|4||kms per day||100||100|
|5||car price||500000||600000||100000 (=C5-B5)|
|6||cost per day||507.1428571429 (=B3*B4)||341.6666666667 (=C3*C4)||165.4761904762 (=B6-C6)|
|7||Days to recover cost||604.3165467626 =(D5/D6)|
|8||Months||20.1438848921 = (D7/12)|
As you see, with petrol and diesel at 71 and 41 respectively, and giving average of 14 and 12 respectively – the cost of owning a diesel car will be recovered in around 20 months (1.5 years), provided everyday run in 100 kms and the difference in price is 1 Lakh. Feel free to copy the info on an excel sheet and try altering the numbers to suit your needs and see when would you be able to recover the cost – if you intend to purchase a diesel car.