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Damage to petrol engine due to water and petrol?

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My brand new car that was 2 weeks old was sent back to the dealer's workshop for inspection after I noticed the tachometer fluctuating when the engine was idling when first started or at the traffic lights. After inspecting, the workshop said that there was water in the diesel fuel. I only pumped about 40 litres of diesel once since I got the car and sent it for the inspection and I have confirmed with the fuel station that the diesel was not contaminated with water. Total mileage of my car is around 581 km and I filled up the diesel fuel for the first time at about 250 km and managed to drive about 330 km with the intermittent tachometer problem.

At the inspection, the workshop drained the fuel tank and cleaned it. They then filled the tank with fresh diesel from a jerry can and ran a test on my car for about 30 minutes. I was not present at that test but the mechanics said that the engine had a knocking problem and nearly stalled (which I did not notice earlier on when I had the intermittent tachometer problem). Therefore, they concluded that the problem was due to the water in the engine and not due to a manufacturing defect.

I was told by the workshop that I would have to completely replace the engine and fuel systems at MY COST as the damage is not covered by the warranty or insurance.

Now the interesting part is that several weeks after that test, I get a picture from the mechanics showing that the jerry can that was used to fill up fresh diesel for the test had the words "PETROL" marked on it! I'm wondering if there were traces of petrol in that jerry can when they topped up the diesel for the test and perhaps this could have compounded the damage to my engine. I've read that petrol in diesel causes serious problems to diesel engines.

I now suspect that:
1) my car has a manufacturing defect as water was present in the fuel tank and I only pumped diesel once and it was confirmed to have met specifications
2) the workshop compounded the damage by negligently filling up the diesel containing traces of petrol, in order to test the engine

I am surprised at the severity of the damage to the engine if it is only just water in the diesel. From what I've read online, it seems that petrol in diesel has more serious consequences than water in diesel.

Appreciate your comments.

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