UK Government Extends Fuel Duty Freeze Through Year-End

The UK government will extend its 5p fuel duty cut through the end of 2026, BBC Business reported Wednesday, pushing back a planned September expiry as petrol prices climb to multi-month highs.

Starmer Cites Middle East Pressure on Fuel Costs

Prime Minister Keir Starmer told the House of Commons the freeze was being extended to protect drivers. He pointed directly to the ongoing US-Israel conflict in Iran as the driver behind tightening global oil and liquefied natural gas supplies. The average price of petrol reached 158.52p per litre on Monday. That is the highest level recorded since the conflict began, according to motoring group the RAC.

Starmer also announced a sharp reduction in the duty rate on red diesel. The rate will fall by more than a third, dropping to 6.48p per litre from mid-June through December. The cut is designed to ease costs for farmers running tractors and other agricultural equipment during a period of elevated input prices.

HGV Operators Also Get Relief

The government added a 12-month vehicle excise duty holiday for heavy goods vehicles. Officials said the measure would help offset rising supply chain costs hitting the haulage sector. A typical large lorry operator stands to save roughly £600 under the scheme. Ministers argued the move would limit the pass-through of higher transport costs to consumer prices.

A Policy With Deep Roots

The 5p fuel duty cut dates back to the Spring Statement of March 2022. The previous Conservative administration introduced it after Russia’s full-scale invasion of Ukraine sent petrol and diesel prices sharply higher. The reduction was originally intended to last just 12 months. It has since been extended repeatedly by successive governments, surviving multiple budget cycles and changing political conditions.

Opposition leader Kemi Badenoch acknowledged the extension but framed it as a reversal. She told MPs her party had been pushing for the move since March and characterized the announcement as a government U-turn.

Questions Linger Over 2027

Industry voices welcomed the relief but flagged the lack of long-term certainty. RAC head of policy Simon Williams said the extension simply delayed a harder decision. He questioned whether drivers would face the full 5p reinstatement in one move next spring, whether a phased approach would be negotiated, or whether the cut might eventually become permanent. Williams said no firm answers had been provided.

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