Chancellor freezes fuel duty and keeps 5p discount to provide some relief to drivers amid soaring pump prices
Chancellor John Healey froze fuel duty at 52.95p per litre and extended the 5p-per-litre cut until July next year, offering drivers some relief as pump prices rise. Fuel duty had been expected to increase for the first time in 16 years, while the discount, introduced in 2022, was initially intended to last only one year.
The decision comes as diesel has exceeded £2 a litre and average petrol prices have reached about £1.75, their highest in more than four years. A survey of 1,208 regular UK drivers found 65 per cent were cutting other spending because of fuel costs and 47 per cent were struggling to fill up; 34 per cent favoured a VAT cut, compared with 29 per cent who preferred lower fuel duty. Healey also raised the higher mileage rate for work-related journeys from 25p to 35p per mile.
In short
- Fuel duty stays at 52.95p per litre.
- The 5p cut is extended until July next year.
- Drivers face record-high petrol and diesel prices.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Keeping fuel duty frozen and extending the 5p cut offers timely help to households and businesses facing unusually high pump prices. Supporters can argue that making travel more affordable protects people who depend on cars, including those with limited public transport or work journeys, and may ease pressure on other household spending.
The case against
Critics can argue that extending a temporary tax cut for a third year gives up public revenue that could support public services or more targeted help for people most affected by fuel costs. They may also favour measures that reduce reliance on petrol and diesel, since cheaper fuel can weaken incentives to use more efficient transport and does not ensure the greatest benefit reaches struggling households.