Fuel duty cut extended to July 2027 in autumn Budget

The 5p cut in fuel duty will stay in place until at least 1 July 2027, after the Chancellor confirmed in the autumn Budget that the planned January rise is cancelled.

Fuel duty has been frozen at 52.95p a litre for petrol and diesel since the 5p cut was introduced in March 2022. Without Wednesday's announcement, the cut would have reversed on 1 January 2027, taking duty to 55.95p, with a further rise to 57.95p scheduled for March under the usual inflation uprating. It is the seventeenth consecutive year in which the main duty rate has not risen in line with its original schedule.

What duty is worth at the pump

At the UK average petrol price of 171.9p a litre (FindPetrol data, 29 October 2026), roughly 47p in every litre is tax in the narrower sense: 52.95p of duty plus about 28.7p of VAT, which is charged on the whole price including the duty itself. The remaining 90.3p covers the fuel, its delivery and the retailer's margin.

The Treasury estimates the extension saves the average car driver around £230 over the year ahead compared with the previous plans, and around £4,000 for a typical HGV driver. For a 55-litre tank, the cancelled January rise alone would have added about £2 per fill once VAT is included.

What did not happen

Ministers rejected calls to go further. Motoring groups had asked for a deeper cut - the AA wanted a further 5p off the rate, and FairFuelUK campaigned for 10p - and there had been pressure to cut the 20% VAT charged on fuel. VAT was left unchanged.

The Treasury's own figures underline why the duty decision attracted so much attention: it said diesel had exceeded £2 a litre in October and had risen by 41% between February and October, the fastest sustained rise since the energy crisis.

Reaction

The RAC welcomed the freeze but cautioned that a duty freeze is not the same as cheaper driving. Rod Dennis said the decision "keeps a floor under pump prices" and said drivers would hope to see easing international tensions bring the oil price down over the winter, since crude is the largest single component of the pre-tax pump price. You can follow that relationship on our fuel price trends page, which charts UK pump prices against Brent crude back to 2020.

The Office for Budget Responsibility estimated in 2025 that the sequence of freezes since 2011 has cost the Exchequer around £120bn in revenue, a measure of how expensive the policy has become.

Elsewhere in the Budget

Several related motoring measures were extended to the same 1 July 2027 date: the £1 VED rate for HGVs and the 3.7p cut in red diesel duty. Company car and van mileage rates were increased permanently. Vehicle excise duty for cars, vans and motorcycles will rise with inflation from April 2027 as previously planned, and the pay-per-mile charge for electric vehicles remains scheduled for April 2028.

What it means for drivers

Duty staying at 52.95p removes one source of upward pressure at the start of 2027, but it does not cap the pump price: the fuel itself, priced in dollars, moves with the oil market and with the pound. The spread between the cheapest and dearest petrol stations in most towns is wider than the whole of the cancelled January rise, so comparing petrol prices near you remains the fastest saving. Our UK fuel price index publishes national and regional averages every week, and each edition can be downloaded as a CSV.

About these figures: FindPetrol collects pump prices from UK petrol stations under the CMA's open fuel price scheme. Site-wide averages quoted here cover every station with a live price report and refresh throughout the day. Duty and VAT rates are as announced in the autumn Budget of 28 October 2026. Journalists are welcome to quote these figures with a link to findpetrol.co.uk.