Chancellor freezes fuel duty and keeps 5p discount to provide some relief to drivers amid soaring pump prices
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Chancellor John Healey today froze fuel duty and kept the 5p discount to provide some relief to hard-pressed drivers amid soaring pump prices.
Fuel duty was due to be unfrozen for the first time in 16 years, but Mr Healey has bowed to pressure to keep it at 52.95p per litre in his Budget.
The 5p cut first introduced in 2022 amid the Ukraine crisis, which was only supposed to last a year, has also been extended again until July next year.
As he revealed his Budget to the House of Commons on Wednesday, Mr Healey told MPs: 'Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years.
'With the war in the Middle East still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers, and farmers.
'And for anyone who relies on their car for their work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and making permanent the increase to the standard mileage rate introduced earlier this year.'
Chancellor John Healey today froze fuel duty and kept the 5p discount to provide some relief to hard-pressed drivers amid soaring pump prices
Petrol and diesel prices have continued to soar this year, as a result of the Iran war and ongoing disruption from Russia's invasion of Ukraine.
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Diesel pushed past the record price of £2 a litre earlier this month, while average unleaded petrol prices have reached around £1.75 a litre, their highest in more than four years.
It means 2026 is on course to be the second most expensive year on record for drivers to fill up, despite fuel duty having remained at its current rate since 2022, the RAC said.
Responding to the Budget, RAC senior policy officer Rod Dennis said: 'While drivers may breathe a mild sigh of relief knowing that fuel duty isn't about to suddenly go up, many are likely to be disappointed the Chancellor didn't go further to support them – not least as the freeze is only in place until next summer.
'RAC research published yesterday showed nearly two-in-three regular drivers wanted cuts to duty or VAT on fuel, with a similar proportion now cutting back on other spending because of the high cost of fuel.
'The freeze only avoids making an already difficult situation worse – it doesn't make filling up any cheaper.
'And it's worth remembering that pump prices still soared this summer, despite fuel duty being at this very same reduced rate.
'Drivers will now have to hope for an easing of the international conflicts that have pushed up oil prices and disrupted fuel supplies if pump prices are to come down in a meaningful way.
'In the meantime, they can ensure they always pay the lowest price for filling up by using the free myRAC app to locate the cheapest forecourts up and down the country.'
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