MPs have questioned why British citizens will have to pay out for both an identity card and an ePassport - when both contain similar information.
New biometric passports contain a security chip
Similarities in production "should be reflected in the combined fee", the Commons public accounts committee said.
Passport costs have gone up since 2003 to pay for the new biometric passports and future security measures.
The Home Office says both ID cards and passports are needed as they have different functions.
The cards will be also used by UK-based foreigners.
The new ePassports were introduced in 2006, to comply with international requirements. An adult passport currently costs £72.
They have a microchip containing biographical details - including the passport photo - which are scanned at a reader.
ID cards are due to be introduced on a voluntary basis from 2008 but not to become compulsory until at least 2010, when all passport applicants will be issued with them.
The report said: "Synergies in the production of the two documents should be reflected in the combined fee for an ePassport and identity card.
"The Home Office needs to explain the underlying rationale as to why citizens need an identity card as well an ePassport, particularly as the ePassport offers broader utility in terms of global travel."
Concerns were also repeated that, while ePassports have to last ten years, the microchip only has a two-year warranty.
Committee chairman Edward Leigh congratulated the Home Office's Identity and Passport Service (IPS) for bringing in the ePassport scheme on time and on budget.
But he said concerns remained about the durability of the microchip in ePassports.
He said: "The public will want to be told just how durable the chip is and, if it stops working, who will pay for a replacement.
"The prospect of ePassport failures contributing to yet further delays at border controls is not an enticing one."
Mr Leigh added: "The Home Office needs to explain why an ePassport could not serve both purposes.
"At the very least, the Identity and Passport Service should reduce areas of overlap as the identity card project progresses and make sure that the combined fee for the two documents is minimized."
An IPS spokesman said "best value for money" was being ensured by developing common systems and application processes for both documents.
But he said they differed as only British nationals got British passports, while all adults resident in the UK would be covered by the ID card scheme.
He added that ID cards had extra functions that the ePassport chip, which was "constrained by international standards", could not include.
"The ID card will enable you to confirm your identity in a secure, convenient way in a range of transactions with public and private sector organisations that you cannot with an ePassport," he said.
IPS chief executive James Hall has said if microchips failed, the IPS would have to replace the passport.