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How Fuel Cost Is Calculated
The fuel cost formula is straightforward: Fuel Cost = (Distance ÷ Mileage) × Fuel Price. The key variable that most people get wrong is mileage — using the manufacturer's ARAI figure instead of real-world performance.
| Fuel | Formula | Example (300 km) |
|---|---|---|
| Petrol/Diesel | (Distance ÷ km/l) × ₹/litre | (300 ÷ 15) × ₹100 = ₹2,000 |
| CNG | (Distance ÷ km/kg) × ₹/kg | (300 ÷ 22) × ₹80 = ₹1,091 |
| EV | (Distance ÷ km/kWh) × ₹/kWh | (300 ÷ 6) × ₹8 = ₹400 |
💡ARAI vs real-world mileage: ARAI figures are measured under controlled lab conditions. Real-world mileage in Indian city traffic with AC is typically 20-30% lower. A car claiming 20 km/l ARAI delivers 14-16 km/l in actual use. Always input real-world mileage for accurate cost estimates.
Petrol vs Diesel vs CNG vs EV — Which Is Cheapest in India?
| Fuel Type | Cost per km | Monthly (1500km) | Pros | Cons |
|---|---|---|---|---|
| Petrol | ₹6–8 | ₹9,000–12,000 | Widely available, smooth performance | Most expensive per km |
| Diesel | ₹4–5 | ₹6,000–7,500 | Better mileage, good for highway | Louder, maintenance, phasing out in cities |
| CNG | ₹3–4 | ₹4,500–6,000 | Cheapest fuel per km, low emissions | Limited range, boot space loss, station availability |
| EV (home charging) | ₹1–2 | ₹1,500–3,000 | Lowest running cost, zero emissions | Higher purchase price, range anxiety, charging time |
How to Improve Fuel Efficiency — India-Specific Tips
- Tyre pressure: Under-inflated tyres reduce mileage by 5-10%. Check monthly — recommended pressure is in your owner's manual or door jamb sticker.
- AC use: AC reduces mileage by 10-20% in city traffic. At speeds above 80 km/h, windows-down drag costs more than AC.
- Speed: Mileage peaks at 60-80 km/h for most Indian cars. Above 100 km/h, aerodynamic drag increases fuel consumption sharply.
- Smooth driving: Avoid harsh acceleration and sudden braking. Anticipate traffic lights and coast to a stop.
- Engine warm-up: Modern fuel-injected cars don't need extended warm-up. Drive gently for the first 2-3 minutes.
- Regular service: Clogged air filters, worn spark plugs, and dirty fuel injectors each reduce mileage 5-15%.
- Fuel quality: Use the recommended octane rating (87 vs 91 vs 97). Higher octane in non-high-compression engines wastes money.
Frequently Asked Questions
Fuel Cost = (Distance ÷ Mileage) × Fuel Price per litre/kg/kWh. For example, a 300 km trip in a car with 15 km/l mileage at ₹100/litre: (300 ÷ 15) × 100 = ₹2,000. Always use real-world mileage — 20-30% lower than ARAI figures for Indian conditions.
Petrol prices vary by city. Approximate 2026 prices: Delhi ₹94.72/L, Mumbai ₹103.44/L, Bengaluru ₹101.94/L, Chennai ₹100.75/L, Hyderabad ₹104.95/L, Kolkata ₹96.20/L. Prices change with global crude oil rates. Check iocl.com or your state oil marketing company for current daily prices.
Yes, significantly. CNG at ₹80/kg with 22 km/kg mileage = ₹3.64/km. Petrol at ₹100/L with 15 km/L = ₹6.67/km. CNG is approximately 45% cheaper per km. However, CNG vehicles have reduced boot space, limited station availability outside major cities, and shorter range per fill.
ARAI mileage is tested under controlled lab conditions — constant speed, no AC, no traffic. Real-world mileage is typically 20-30% lower due to city traffic, AC use, road conditions, and driving style. A car claiming 20 km/l ARAI delivers 14-16 km/l in Indian city traffic. Use real-world figures for budget planning.
Yes, EVs are 5-6x cheaper per km. EV at 6 km/kWh, electricity at ₹8/unit = ₹1.33/km. Petrol at ₹100/L, 15 km/L = ₹6.67/km. On 1,500 km/month: EV costs ₹2,000 vs petrol ₹10,000 — saving ₹8,000/month. However, EVs cost ₹3-8 lakh more upfront. The break-even on running cost savings is typically 4-6 years.
Monthly Fuel Cost = (Monthly km ÷ Mileage) × Fuel Price. Calculate monthly km as: (Daily commute × 2 × Working days) + Weekend/errand km. Use the Monthly Expense tab above — enter your commute distance, working days, and any extra travel for a complete monthly and annual fuel budget.
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📅 June 2026 · Written by the ToolLoom Team · Reviewed for accuracy June 2026
About ToolLoom: Fuel prices sourced from IOCL/BPCL/HPCL public rates. Real-world mileage ranges based on Indian driving conditions. Found an error? Email contact@toolloom.in
About ToolLoom: Fuel prices sourced from IOCL/BPCL/HPCL public rates. Real-world mileage ranges based on Indian driving conditions. Found an error? Email contact@toolloom.in