Starmer Extends Fuel Duty Freeze to Year‑End, Citing £455 Million Cost

The duty reduction was first introduced in March 2022 by the previous Conservative government after Russia’s invasion of Ukraine pushed oil prices up. Since then, the cut has been renewed several times, most recently set to end in September. Rising petrol and diesel prices, driven by the conflict in the Middle East that has tightened global oil supplies, have kept pump costs near record levels. The average price of petrol hit 158.52p per litre on Monday, according to the RAC.

- The extended freeze will run to the end of the year instead of being phased out in September. - Downing Street estimates the measure will cost £455 million for the current tax year. - Starmer told the House of Commons that the government is “backing drivers” by extending the freeze. - In addition, the fuel duty rate on red diesel will be cut by over a third to 6.48p per litre from mid‑next month, aiming to help farmers. - A 12‑month holiday on vehicle excise duty for heavy goods vehicles will save a typical haulier about £600 per lorry.

Drivers will see no immediate increase in fuel tax, keeping pump prices slightly lower than they would be if the 5p rise returned. Farmers using red diesel will benefit from a reduced rate, potentially lowering operating costs for tractors and machinery. Hauliers gain temporary relief from vehicle excise duty, which could ease some supply‑chain pressures. However, analysts note uncertainty about what happens after December, with questions whether the duty will jump back fully, be phased, or be altered again.