Let us suppose that the old price of $1$ liter petrol $=100$
New price of $1$ liter petrol $ = 100 + \dfrac{25}{100}\times 100 = 125$
A person can not afford $25$ rupees extra for $1$ liter petrol,so he reduce his consumption,so that expenditure remain same.
$\% $ Consumption reduced $ = \dfrac{125-100}{125}\times 100 = \dfrac{25}{125}\times 100 = 20\%$
Option $(C)$ is the correct answer.