Bro i havent experimented changing tyres with my passo yet, but i have learnt from past experiences that OEM tyre size is the best for fuel economy and sound suspension.
I owned an Alto and City before Passo and for "shashkas and grip" i went for bigger tyres and aftermarket rims.
Both ruin the ride smoothness in terms of maneuverability and like @ali.archilounge mentioned the ride became more sluggish.
And yes it does hurt your fuel average aswell.
Now regarding the decision about changing your tyres.
- 1st Gen Passo's average is around about what you are getting. Atleast that is what i have heard from people and seen in this thread.
- Tyres are expensive, its a fact. And only 165-70-14 new tyres you will get here are Kumhos. Rs 5,000 per tyre (as per my limited knowledge). So if your tyres are new, changing them will be costly.
- Your daily running is also a factor. Like for me, my car does 25 km daily, so saving 1-2 km/ltr by changing my new tyres to 165-70-14 wont be that beneficial for me in the short run.
So answers to your questions.
Difference in mileage .. can't give you a figure but it will be max 2.5 km/ltr to be optimistic
Should u update tyres .. 3 points above
Possible effects .. smoother lighter ride. easy on your suspension. less bumpy. better mileage. will fly on highway
Hope this helps
P.S. Try asking Racy owners about their mileage.
2nd gen Passo's hav better mileage, dunno must be the design and newer engines. So comparison with them is not like with like