Re: *Attached* : Fuel cost calculator, including a comparison between Petrol & Diesel Thanks for your replies guys. I hope some expert on oil and economy can shed some light on fuel price trends. Quote:
Originally Posted by GTO As you rightly said, the breakeven period for a diesel car has fallen. |
I'm working on some actual historical data now to validate the assumptions. Will post the results soon. Quote:
Originally Posted by phamilyman If one wants to just buy cars based on projected savings and excel sheets instead of real world drivability & driving pleasure - may I suggest you buy your next car as a tata Diesel? heck - why buy it at all, I am sure we can cook up calculations that show that under 12k/year - its cheaper to rent than buy. Why even buy at all? A Tata Diesel is a good option to buy indeed. For a change, why don't you cook up the calculations for that cheaper rental plan for us all to eat? Lastly, like a certain gent by the name of anupmathur once said - buying cars is an emotional process. You cannot put the price on fun. Why buy fancy phones? Buy an el cheapo 1000 rs simple phone to call, no? Saves 15-20k/year clearly. Buying car may be an emotional process but it is not only an emotional process for majority of the buyers. You cannot drive at the redline all the time and majority of car drivers will never even take the needle anywhere close to redline. As for the cliche of fun being priceless, it is precisely to know if the fun is worth the moolah that these calculation would be made by buyers. Bah. Ha! |
Replies in bold above. Quote:
Originally Posted by Fordmanchau ...he has only considered fuel cost as a major component for arriving at his results and that's not a fair comparison IMO.
We all know there are many other factors that affect the ownership cost of petrol and diesel. Let's not even talk about the maintenance cost but atleast take into consideration the additional interest cost on the difference of price between diesel and petrol cars, may be at the rate of 13-14%.
Also, it would not be prudent to assume that petrol cost will increase 10%/5% every year.
As of now it might seem a practical assumption, but going forward as we truly progress to market economy, we might find that taxes are rationalised and both diesel and petrol are almost priced similarly.
Please keep in mind that processing cost of both the fuel is same and if the govt actually cuts taxes and deregulates the price of diesel and other fuel. We might just find that diesel is costlier than petrol as is the situation in other matured markets of the world due to market forced conditions.
Although a very good attempt to get a rough idea of the running costs but it is still far away from the ground situation and disconnected to the market conditions, I would say. |
You said it yourself right there. Ownership cost! My calculations are for running cost only which is one of the three factors in ownership cost, the other two being initial purchase cost and maintenance cost. The other two are more or less known to us in advance. As for the interest on difference between petrol and diesel purchase cost, I'll say the interest also applies to the cumulative savings you make every year with diesel. Since inflation affects both equally, the comparison is still valid.
I doubt that the government will have the power to deregulate diesel any time soon. Quote:
Originally Posted by mayankjha1806 Question, most D's are about 1.5L more expensive than their petrol counterparts. Once i do the math my break even comes close to year 6. Is it than advisable to still go for Diesel? |
If you intend to keep the car for more than your break even period, why not? Quote:
Originally Posted by Newpunter Seems like for my limited running ( I have managed a paltry 4K kms in nearly a year of owning my car ), Petrol still makes sense, without even considering the extra EMIs and interest on a Diesel car. |
I think you'll be surprised that even with 4K km/yr and the added interest, you'll still break even in around 10 years. Your point is taken though, break even is quite far removed in future to weigh that much on the buying decision. Quote:
Originally Posted by neel385 ...that diesel burners give better mileage has another significant advantage. Its good for the planet. With the expendable income all over the world, specially the third world rising significantly, the number of vehicles on the roads are only going to increase thereby putting greater strain on the environment. Hence this itself is good reason to go diesel. |
I won't be too sure of the environmental friendliness. Diesels are more efficient but are more polluting than petrol in some ways (release of NOX, particulates etc). The sheer scale of diesel use (in industry, shipping, railways and heavy transport vehicles) might dwarf the benefits against petrol in carbon emissions etc. The debate round the world on this issue is far from conclusive. With tighter emission control in petrol engines these days, petrol cars don't face much threat from diesel cars in developed countries where there is minimal disparity in prices. Quote:
Originally Posted by dot For deregulated petrol to cost Rs250 per liter Crude futures will be in 350-400$ per barrel range. For that to happen Dollar, against which crude is pegged, has to lose value completely. i.e inflation strikes the dollar. Alongside Rupee also loses its value. While that might actually happen much sooner than we think, Crude futures may not go up as commodity prices will take a hit since there will be dearth of demand. Further if alternate supplies of hydrocarbons like shale becomes a dominant force due to ramped up supply, it will certainly cap crude prices. So I feel inflation adjusted petrol prices may actually never touch such rates. I am no economist or foreseer, it is just my theory.
If petrol prices and diesel never touch such levels, the savings will be continuous and not increase linearly. It might be continue to be around 40-60k per annum for a diesel car (10-12k Kms p.a.).
If we forget crude, dollar and world demand and supply and apply simplistic inflation rules and say that fuel prices will go up as inflation is 8% p.a. in
India. Like your friendly investment banker or advisor says that child education will be in tens of lakhs by the time you retire or you would need Rs 10000000 per month in 2040 if you are spending is Rs30000 per month now.
But lets not forget salary or monthly income will also grow in lock step.
15 years back a fresher used to land a 10k per month job and it was a big thing. Now a fresher lands up 30-40k per month. Thats 3-4x increase. Petrol prices in 15 years has gone by ~2x.
So affordability has increased. I feel it will continue to increase. |
A very very valid observation dot, thank you for bringing it out. I'm not well versed with crude economy either. But seeing the crude trends, the prices and futures in crude have risen and erratically no matter what the experts predicted. Remeber a few years back when crude stayed steady above 100$ a barrel?
About the OT on affordability, salary increases or not, diesel remains more profitable to run than petrol. I'll try and work out another possibility of global crude remaining stable at current prices.
Last edited by Delta Wing : 20th May 2011 at 22:39.
Reason: typo
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