How rising costs will affect UK drivers

In a typical year, the government nets £7 billion from vehicle excise duty (widely known as road tax). That’s a lot of money, but it wants more. As of last month, the standard rate of road tax rose by £10, while for the first year of a car’s registration, rises will range from £5 for some of the least-polluting cars to £120 for the worst offenders. On the plus side, electric cars will continue to attract no road tax and hybrid and alternative-fuel cars will go unchanged at £155.

Fuel

Petrol and diesel up 30% and 36% respectively in 12 months, EV home-charging energy up 54%

Higher fuel prices are the most obvious evidence of the rising cost of motoring. Government figures reveal that at the end of March, a litre of petrol cost £1.63, compared with £1.25 a year ago – an increase of 30%. Therefore, a car with a 55-litre petrol tank now costs £20.90 more to fill – from £68.75 in March 2021 to £89.65 today. And prices are expected to keep rising.

Back in March, the chancellor stepped in to help motorists with a 5p per litre cut to fuel duty, to last until March 2023. The RAC welcomed the cut but said that it would only take prices back to where they had been the week before. Meanwhile, from this month, EVs will be pricier to charge at home when the energy price cap on certain standard variable rate deals rises by 54%. It means that an EV with a 60kWh battery that currently costs about £9 to charge will instead cost £14 – £5 more. Users on a fixed tariff risk paying as much as 80% more to charge their EVs. There are always public chargers – except they’re already at least twice as costly as charging at home, in part due to the fact that VAT is charged at 20%, rather than 5%. Worse still, in recent weeks, some energy providers have raised their tariffs by around 11%. Further rises are expected.