‘Petrol premium’ rises £100 a year as Ofgem price cap makes EV charging cheaper

Ofgem’s lowering of the price cap could save EV owners more than £75 a year in charging costs.

Profile picture of George Smeeton

By George Smeeton


Last updated:

Petrol prices have recently risen as a result of attacks on shipping in the Red Sea [2], potentially adding about £25 a year to fuel costs. Petrol drivers already pay a significant ‘petrol premium’ to operate their cars compared to EVs. Today's fall in electricity prices, combined with rising petrol prices, could increase this premium by more than £100 to £675 a year.

This is indicative of a pattern that we are likely to see continue for the rest of the decade. Analysts expect electricity prices to continue falling, whilst petrol prices are likely to continue increasing as they have done for the last 20 years. Past analysis by the ECIU indicates that, by 2030, this will result in petrol cars becoming £1,350 more expensive to operate [3] than their electric equivalents than they are today.

Commenting on the analysis Colin Walker, Head of Transport at the Energy & Climate Intelligence Unit said: “Drivers of petrol cars already pay a significant petrol premium to run those vehicles, compared to EVs. This premium will only get higher as electricity prices come down and EVs become even cheaper to run.

"Political instability has historically driven petrol price volatility and this is set to continue. EVs help protect consumers from these price shocks, and as the second-hand EV market continues to expand more households are able to afford to buy an EV and make these savings. As North Sea oil output inevitably declines, EVs can be charged on electricity generated from wind farms instead.”

Notes to editors:

1. Ofgem: Changes to energy price cap between 1 April to 30 June 2024: https://www.ofgem.gov.uk/publications/changes-energy-price-cap-between-1-april-30-june-2024

2. UK Petrol Prices Jump Amid Houthi Attacks in Red Sea: https://www.bloomberg.com/news/articles/2024-02-21/uk-petrol-prices-jump-amid-houthi-attacks-in-red-sea

3. ECIU: The future costs of running an electric vehicle: https://eciu.net/analysis/reports/2023/the-future-costs-of-running-an-electric-vehicle

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, email: george.smeeton@eciu.net