So due to my daily commute being about 15 km, I ended my first full tank of petrol in one whole month. Not bad. Average mileage at end of tank = 12.6 km/L in city driving in Karachi with AC. So mileage meter is working correctly and can be relied upon.
However, when I got my tyre pressures checked, they came out to be 25 psi. Seems like after wheel balancing, the Toyota folks reduced tyre pressures to a lower number. I have gotten the tyres re-pressurised and now up to 32 psi. Also got half tank of petrol. Now will see how the mileage is affected by tyre pressure changes.
@ MohsinJ: You got that right... it seems like average for this car in city driving with AC is really around 12-13 km/L. On open roads it really shoots up to 19-22 km/L especially around 80-90 km/h range and especially if you have OD on, it seems like the car is flying - it runs very smoothly at this speed, even more so than a City!