NEW DELHI: The share of diesel cars in the overall passenger car segment has come down to around 22 per cent, against a high of nearly 50 per cent in 2012-13. Among many factors that is instrumental in decreasing the demand for diesel cars in India, the reduction in price difference gap between petrol and diesel tops the chart. From a peak price gap of `29 a litre, diesel is now cheaper by only `5-8 a litre. In states like West Bengal, it’s merely a rupee.
The reducing gap has now almost eliminated the brownie point offered by diesel cars — a cheaper fuel that gives extra mileage of 5-7 km per litre — and people have now started questioning its future. A simple analysis on a popular vehicle (Maruti Suzuki Swift) highlights why it is not wise to go for a diesel vehicle anymore.
The top variant of Swift’s petrol variant costs `7.76 lakh (ex-showroom in Delhi) and gives a mileage of 22.4 kmpl. If the driver uses the car for 1,500 kilometre a month, he will end up spending about `5,300 at current (Sunday’s) prices.
The topmost diesel variant of the same car costs `8.76 lakh (ex-showroom in Delhi). However, diesel being more fuel-efficient, for the same distance a user will end up spending `3,827 a month, around `1,450 less than the petrol variant.
Given that the petrol variant costs around `1 lakh less than the diesel variant, the savings alone can provide fuel for the petrol variant for at least 20 months. In other words, one can also say that it would take you around six years just to recover the basic ex-showroom price difference. If we add interest rate on EMIs of those extra bucks, the final cost of owning diesel vehicle would go up even more. Crackdown by government on diesel vehicles to curb air pollution and availability of utility vehicles in petrol variants is also lowering diesels’ demand.
Experts we spoke to advice that unless you run your car like a tour operator, it does not make much sense to invest in a diesel car anymore. Instead, the extra lakh can be used to buy a high-end safety equipment and features-rich variant. From a financial point of view, investing that money in Fixed Deposit or in some blue-chip stock would reward you with some handsome returns. Other pro-petrol arguments are lower rate of depreciation and a better resale value.
According to an ICRA report, it is expected that post-BS-VI emission norms implementation, the diesel car will become `75,000 dearer, while the petrol car will only see a hike of `20,000. The report estimates that the share of diesel vehicles in the overall passenger vehicles, including UVs, will go down to below 25 per cent by FY2022 from 36 per cent in FY2019.
Why future of the diesel variant cars is in question
■ A cheaper fuel that gives extra mileage of 5-7 km per litre was the brownie point for diesel
■ However, the gap between petrol and diesel prices is narrowing. From a peak of I29 a litre gap, diesel is now cheaper only by I5-8 a litre.
■ An ICRA report says that post implementation of BS-VI emission norms, diesel cars would get dearer by I75,000, while petrol cars will only see a hike of I20,000
