Correct Answer  Option 1 : 16.66%
We know that:
For an increase of a% in the quantity, the new quantity is obtained as:
New quantity = [(100 + a)/100] × initial quantity
Hence, the given data can be tabulated as follows:

Rate (in Rs./kg) 
Weight (in kg) 
Initially 
x (assume) 
y (assume) 
Finally 
[(100 + 20)/100] × x = 1.2x 
z (assume) 
As the overall expenditure remains constant, we get
x × y = 1.2x × z
⇒ y = 1.2z
⇒ z = (1/1.2)y = (5/6)y
So, the percentage decrease in the consumption of sugar = {[(y – (5/6)y)]/y} × 100 = 16.66%
∴ The percentage decrease in the consumption of sugar is 16.66%