If the price of petrol is increased by 30%,by how much percent a car owner must reduce his consumption in oder to maintain tha same budget?
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If the price of petrol is increased by 30%, by what percent must a car owner reduce his consumption in order to maintain the same budget?
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Aditya Ramakrishnan, Pursuing B.Tech Petroleum Engineering degree, 2014-2018
Answered Jun 23
Let's take up the following scenario:
Current petrol price is at Rs. 76; the common man has a car which gives an average of 10 km per litre in the city (that's actually decent BTW) and let's assume that our common man travels 50 km daily for all his needs.
So, by calculations, the amount of money spent per month is:
Amount= 70*(50÷10)*30= Rs. 11400 per month.
Now, if the petrol price rises by 30%, then the new price will be:
New price= 70+(0.3*70) = Rs. 98.8 per litre.
To keep within the budget of Rs. 11400 per month, our fellow will have to now travel:
(11400*10)÷(98.8*30) = 38.5 km per day.
He will have to reduce his travel distance by 11.5 km to keep his budget intact. In terms of percentage, our common man will have to reduce his travel by 23% to stay in his budget.
Almost a quarter of his daily travel will have to be reduced.
All of the above is an ideal case and varies a lot depending on many variables, but I hope this helps you and answers your question.
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4 ANSWERS

Aditya Ramakrishnan, Pursuing B.Tech Petroleum Engineering degree, 2014-2018
Answered Jun 23
Let's take up the following scenario:
Current petrol price is at Rs. 76; the common man has a car which gives an average of 10 km per litre in the city (that's actually decent BTW) and let's assume that our common man travels 50 km daily for all his needs.
So, by calculations, the amount of money spent per month is:
Amount= 70*(50÷10)*30= Rs. 11400 per month.
Now, if the petrol price rises by 30%, then the new price will be:
New price= 70+(0.3*70) = Rs. 98.8 per litre.
To keep within the budget of Rs. 11400 per month, our fellow will have to now travel:
(11400*10)÷(98.8*30) = 38.5 km per day.
He will have to reduce his travel distance by 11.5 km to keep his budget intact. In terms of percentage, our common man will have to reduce his travel by 23% to stay in his budget.
Almost a quarter of his daily travel will have to be reduced.
All of the above is an ideal case and varies a lot depending on many variables, but I hope this helps you and answers your question.
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