 "Your annual fuel savings from crude price decline: Rs 8,450")
If you drive a petrol car that runs 10,000 Kilometer (Km) in a year with an average of 12 Km per liter, your annual savings on the fuel bill are Rs 8,450 at the current price, thanks to the ongoing slump in global crude oil prices.
If you are the owner of a diesel car with 15 Km per liter average, you are saving only Rs 1,860 in a year.
Similarly, the annual fuel bill is seen coming down for truck owners by Rs 55,800 and for bikers by Rs 811 at the current fuel prices, according to equity research firm Edelweiss.
“Apart from lowering inflation pressure, falling crude oil prices will have a big impact on common man’s savings. Fall in crude oil has led to 15% drop in petrol prices this year, and assuming an average car run of 10,000 km per annum, one petrol car owner is saving Rs 8,500 annually while two-wheeler owner is saving Rs 800,” Edelweiss said in its report.
The fall in crude oil price is not completely reflected in diesel as it has been de-regulated only recently. “The savings in fuel prices will increase the discretionary spend by consumers, leading to a pickup in India’s consumption,” the report added.
Taken together, estimated annual savings of all vehicle owners at the national level stand at Rs 48,000 crore – roughly 0.4% of India’s Gross Domestic product (GDP) – if the current crude oil prices sustain.
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An average petrol car, running 10,000 Km annually with an average of 12 Km per liter, would consume 833 liter of fuel. At a petrol price of Rs 68.9 per liter, the owner’s fuel bill would be Rs 57,393 as compared to fuel bill of Rs 65,807 based on last year’s petrol price of Rs 79 per liter. This translates into a saving of over Rs 8,400.
The Indian basket of crude oil price has slumped by over 47% from $110 per barrel in June to $57.91 per barrel currently. The historic decline is a result of decreasing demand in emerging economies coupled with a supply glut on the back of rising US shale oil production. Global benchmark Brent is down 48% since hitting the year's high above $115 per barrel in June.