UK Government Extends Fuel Duty Freeze Amid Rising Petrol Prices

BBC Business reported Wednesday that the UK government will extend its fuel duty freeze through the end of 2026, scrapping an earlier plan to phase out the relief in September.

Freeze Extended as Pump Prices Climb

Prime Minister Keir Starmer announced the decision in the House of Commons, citing ongoing instability in the Middle East as the primary driver. The existing 5p-per-litre reduction on petrol and diesel will now remain in place until December. Starmer framed the move as direct support for motorists facing sharply higher costs at the pump. The average price of petrol reached 158.52p per litre on Monday, according to the RAC. That marks the highest level recorded since the outbreak of the US-Israel conflict with Iran began affecting global oil and gas supplies.

Background: A Temporary Cut That Became Permanent Fixture

The 5p fuel duty reduction was first introduced in March 2022 under the then-Conservative government. It was a direct response to the surge in energy prices that followed Russia’s full-scale invasion of Ukraine. The measure was originally designed to last just 12 months. Since then it has been extended repeatedly, becoming a near-permanent feature of UK motoring policy despite successive pledges to wind it down.

Also Read: What’s Happening to UK Petrol and Diesel Prices? (BBC)

Farmers and Hauliers Also Benefit

Alongside the petrol and diesel announcement, Starmer confirmed two additional measures targeting commercial users. Red diesel duty, which farmers rely on for tractors and agricultural machinery, will be cut by more than a third to 6.48p per litre. That reduction takes effect from mid-June and also runs to year-end. Separately, operators of heavy goods vehicles will receive a 12-month holiday on vehicle excise duty. The government estimates the exemption will save hauliers roughly £600 per typical heavy lorry. Officials said the move is intended to ease supply chain cost pressures that ultimately filter through to consumer prices.

Also Read: UK Spring Statement 2025: Key Measures Explained (GOV.UK)

Questions Remain About What Comes Next

Not everyone was satisfied with the announcement. Simon Williams, head of policy at the RAC, welcomed the extension but flagged significant uncertainty ahead. He questioned whether drivers would face the full 5p increase in a single hit next spring, whether a phased approach would be agreed, or whether the government might abandon any rise at all. Opposition leader Kemi Badenoch acknowledged the extension but characterised it as a U-turn, noting the Conservative party had pushed for the move back in March.

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