Fuel duty has been frozen for another year, chancellor Rachel Reeves has announced in today’s Autumn Budget.
The current rate of 52.95p per litre (comprising a 5p per litre cut introduced during the 2022-23 financial year) will be retained through 2025-2026.
Announcing the freeze, Reeves said: “I have concluded that in these difficult circumstances, while the cost of living remains high, and with the backdrop of global uncertainty, increasing fuel duty would be the wrong decision.
“It would mean fuel duty rising by 7p per litre, so I have decided today to freeze fuel duty, and I will maintain the existing 5p cut for another year too.
“There will be no higher taxes at the petrol pumps next year.”
Reeves said that reversing the 5p per litre cut and allowing duties to rise in line with inflation would have raised £3 billion.
She also announced that company car tax incentives for electric vehicles will be maintained to 2028. Reeves added that the government will “increase the differential” between electric and combustion-engined vehicles in the first-year rates of vehicle excise duty (VED) from April 2025 – the first time EVs will be required to pay VED.
Notably, Reeves has yet to announce any measures to incentivise private buyers to go electric. The Society of Motor Manufacturers and Traders (SMMT), which represents the UK’s automotive industry, has previously called for VAT on the purchase of a new EVs to be cut by half for three years.
This is a breaking news story and will be updated with more information as the Autumn Budget is read
