Background

Well, I’m back to being stuck again at the age old question – Which car is better for me, petrol or diesel? In spite of my previous post detailing the comparison between the two variants on a given date, I was confused when I asked the same question this time around, given the changing fuel prices and the better mileage provided by the new cars. So, I decided to roll up my sleeves and come up with a simple timeless equation that could be used at any time. Here you go. Enjoy!

The equation

The point of comparison that I’ve chosen to use is something I call the Breakeven Distance, i.e., the minimum number of kilometers I have to drive a diesel car in order to compensate the initial extra amount I’ve paid for the diesel variant (usually,  1-1.5 lakh rupees). It’s well-known that for people who don’t drive much, diesel cars don’t provide a lot of value (economically), but by how much? Let’s get into the equation

Initial difference in cost between Petrol and Diesel Variants = I
Price of Petrol = Pp
Price of Diesel = Pd
Mileage of Petrol variant = Mp
Mileage of Diesel variant = Md
Now,
Cost per km in a petrol variant = Pp / Mp
Cost per km in a diesel variant = Pd / Md
Breakeven distance (B) = I / ((Pp/Mp) - (Pd/Md))

Note that I haven’t taken into account the service and maintenance cost of both variants. Diesel is typically higher. So, the above equation gives the minimum distance you have to drive your diesel car before you start seeing the economic benefits of the lower priced diesel fuel, assuming that the maintenance costs are the same for the diesel and the petrol variants!

Here’s the breakeven distance without considering the maintenance cost for a few well-known models based on the fuel prices in Bangalore as of Aug 30, 2014, the ex-showroom prices in New Delhi:
(Note: The below list is a good enough comparison for practical decision-making purposes)

Petrol Price: Rs. 77.11, Diesel Price: Rs. 63.46 (Bangalore, as of Aug 30, 2014)

You can also download this Excel sheet if you want to plug in the latest prices and calculate the distance: Petrol-Diesel-Comparison-Formula