The rising cost of running a car has been a recurring theme for a long time now, and for electric vehicles (EVs), we can’t overlook that electricity prices have also been increasing. For many car buyers, this additional cost has been an unwelcome burden.

However, something strange yet welcome is emerging; lower costs. It’s the sort of good news that’s always a pleasure to share with customers.

Petrol and diesel

At the end of April last year, petrol prices hit 150.6p. Today, a litre of petrol costs, on average, 135.54p. The net result is that drivers are now saving 15p a litre when they fill up, or £8.28 for a full 55-litre family car tank. Encouragingly, these prices could drop further.

Falling oil prices are driving potential reductions in pump prices: today, a barrel of oil costs around $70, compared to above $80 in mid-January. The question is whether petrol retailers will pass on the savings they see as their storage bunkers are refilled with cheaper fuel. If they do, then the RAC estimates petrol could fall by around 6p a litre.

Furthermore, the Competition and Markets Authority (CMA), assigned by the Government to oversee competition in the sector, reported that petrol retailers overcharged drivers by £900m in 2022 and £1.6bn in 2023.

This prompted the CMA to express concerns regarding the level of competition among fuel retailers. Its upcoming quarterly report is expected to be published soon, and it will be intriguing to observe how, if at all, this affects the situation.

Electricity prices

For electric vehicle drivers, businesses, and homeowners, there is the curious prospect of falling electricity prices, just as the new Energy Price Cap came in on April 1st, bringing with it higher prices.

Thanks to the falling wholesale prices, people can now fix their utility prices, saving themselves 13%-plus compared to the new Price Cap, according to MoneySavingExpert. For EV drivers, that’s a higher fall than has been seen in petrol prices over the last year.

The price certainty and instantly lower prices will be welcome, but the fact that utility providers are happy to offer such lower prices could point to further reductions in the coming months.

The overall situation is that whether a car is powered by petrol, diesel or electricity – those ‘fuelling’ costs are falling. For dealers, there could also be the opportunity to reduce operating utility costs as well.

Debbie McKay is distribution director at MotoNovo Finance