Fuel prices peak: How to save money on petrol

11 min Read Published: 10 Jun 2021

Fuel prices peak: How to save money on petrolWith fuel prices at their highest in 2 years, following the largest annual increase since 2010, motorists are increasingly being forced to shell out to fill up their tanks.

The higher prices come partly as the result of retailers trying to make up for lower fuel sales during the pandemic, but the cost of fuel has been gradually rising for years.

Unleaded reached an average of 129p per litre as of 31st May 2021, with diesel scraping 132p per litre, and both have climbed considerably since this time last year - unleaded is up 12p and diesel has soared 18p since May 2020.

Looking for ways to cut your petrol costs? Here are our top 5-tips to save you some cash on your commute:

1. Buy an electric car

Times are changing, and with new legislation aimed at phasing out petrol vehicles being introduced every year, now is the time to consider purchasing an electric car.

By no means does that require you immediately scrap or sell your current car, but if you're looking to replace your vehicle in the next few years, opting for an electric - or, at least, a hybrid - will keep you on top of climate-friendly regulations as well as saving you cash on excess fees such as London's Congestion Charge.

There are a number of differences between electric and petrol or diesel cars. Although electric vehicles tend to be considerably more expensive at the point of purchase, one of the key benefits is the reduced cost to fill up the tank - especially as fuel prices continue to rise.

According to EDF Energy, with the average UK electricity price sitting at around 14p per kW/h - and assuming an electric car will travel 3.5 miles per kW/h on average - it would cost around £4 to travel 100 miles, or just 4p per mile. However, a petrol car would cost around £9 - or 9p per mile - assuming fuel costs £1.09 per litre (using the UK’s average new car fuel consumption rate of 49.2 miles-per-gallon for petrol cars in 2019).

Even then, with unleaded prices some 20p more expensive than EDF Energy's estimate already, the cost of running a petrol car in 2021 is even higher. Although this data is only an indication - and prices vary depending on where you live - an electric vehicle still works out as a more cost-effective option in the long-term for motorists, so long as they are willing to shoulder the initial premium price.

Remember that not all electric cars come with a Tesla price tag though, and there are many wallet-friendly options on the market. EDF Energy has an up-to-date guide to the 10 cheapest electric vehicles to buy. Below is a table showcasing the price difference between the cheapest petrol and electric models for brand new cars from some of the UK's most popular manufacturers:

Retailer Renault MINI Volkwagen
Cheapest petrol model £16,200

(Renault Clio Play)

£16,605

(MINI 3-door Hatch One )

£17,355

(Volkswagen Polo United)

Cheapest electric model £27,595

(Renault Zoe E-Tech Electric Play)

£26,000

(MINI Electric Level 1)

£29,620

(Volkswagen ID.3 Life)

If you're looking to get a new car, visit our guide to the best finance options or our explainer on car leasing options .

2. Use a credit card which gives you cashback or rewards on petrol

For those that have little choice but to drive a petrol car, you still have another option to reduce the price you pay at the meter.

A credit card which offers cashback or rewards, particularly at petrol stations, can be a useful asset for those making regular commutes. There are plenty of credit cards that offer competitive cashback rates, so it's worth having a look around to find the right one for you. There are also some with specific rewards linked to fuel purchases.

Here are some of the most competitive offers on the market for cashback or points on fuel:

Tesco Bank Purchases credit card review Tesco All Round credit card

Representative APR: 20.9% variable

Introductory offer: 18 months interest free on balance transfers

Cashback/rewards offer: For every £4 you spend on Tesco fuel (excluding Esso) and other Tesco shopping you get 5 Tesco Clubcard points. You also get 1 Clubcard point for every £8 spent outside Tesco

Annual fee: No annual fee

For a more in depth review, read our  "Tesco All Round credit card review".

 

Nectar credit card American Express Nectar credit card 

Representative APR: 27.3% variable

Introductory offer: Earn 20,000 bonus Nectar points when you spend more than £2,000 in the first three months of card membership

Cashback/rewards offer: Collect 2 Nectar points for every full £1 spent on the card. Collect a minimum of 3 points per £1 spent with participating Nectar partners, including Esso.

Annual fee: £25 (£0 in the first year)

 

Santander All in One Credit Card Santander All in One credit card

Representative APR: 23.7% variable.

Introductory offer: 26-month interest-free period on balance transfers and 20 months on purchases. No balance transfer fee.

Cashback/reward offer: 3% cashback on petrol across stations including BP, Esso, Texaco, Asda, Morrisons, Tesco and Sainsbury’s. 0.5% cashback on all spending. They can also sign up to Santander's free Retailer Offers scheme, which gives up to 15% cashback from a range of major retailers.

Annual fee: £36 (£3 per month).

For a full review of the Santander All in One card, read our article.

You can check out our guide to the best cashback and reward credit cards to look at the other options that are out there too.

3. Make your car more fuel efficient

There are a number of ways in which you can optimise your vehicle's fuel efficiency.

For example, wind resistance can hike up fuel consumption, so removing roof racks and cargo boxes will make your car more aerodynamic and could save you up to 20% on fuel over the course of a year. Keeping your windows shut while travelling at high speeds will also make your vehicle as streamlined as possible.

You can also minimise your petrol usage by keeping your tyres well inflated and avoiding using air conditioning unless you really need to. The RAC claims that correctly inflated tyres can improve fuel consumption by up to 2%, and air con is an expensive luxury, so consider rolling down the windows on a hot day instead.

4. Drive slowly and more efficiently

Adjusting the way you drive could help you spread your fuel across more journeys.

For example, try accelerating and braking more gradually so that your vehicle is not forced to gulp down gallons of petrol on each turn. The less braking and accelerating, the less fuel you will use. Some motorists let the revs (revolutions per minute or RPM) run to 3,000 per minute (in a petrol car) and 2,500 (in a diesel car) before changing up a gear, but it is more fuel efficient to move up a gear at 2,500 and 2,000 respectively. Use higher gears - such as fifth and sixth - as much as possible.

Or, consider driving more slowly, as dropping from 80mph to 70mph could save you up to 25% on your fuel. Slowing down from 70mph to 60mph on smaller suburban roads could save you another 10% on top. Beware of speed bumps too, as having to repeatedly brake hard and accelerate will cost you extra fuel, so drive along at a steady pace and approach them at a gentle roll to give your car and your wallet some respite.

5. Make fewer journeys

Making fewer journeys - or none altogether - is unsurprisingly the most straightforward and cost-effective way to save money on fuel.

If you're in a generous mood, sharing your vehicle with other people heading in the same direction could save on your fuel consumption, with apps such as Liftshare offering a cash-efficient way to split the same journey for multiple people - and it has the added bonus of being better for the environment, by cutting down on the excess pollution that multiple cars would have produced across the same route.

Or, the obvious solution, simply use your vehicle less. Consider walking to work if the journey is manageable, or make use of the various cycle hire schemes available in the UK's major cities, such as Santander Cycles, Lime or Uber's electric bike scheme. Not only will opting to cycle your journeys help keep you active, but as fuel prices continue to climb and the climate crisis looms ever more ominously over us, you would be saving money and doing your bit for the environment at the same time.

More money-saving tips

Looking for other ways to cut costs? Visit our article "25 money saving tips that could save you thousands", our list of the best budgeting apps in the UK, or check out our "big picture budgeting" guide.

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