John Healey has confirmed a new rule affecting every petrol and diesel motorist, with experts suggesting the new update could have a £60 impact. Petrol and diesel fuel duty rates were expected to increase in early 2027, with Labour looking at reversing the Conservatives’ 2022 5p cut. However, in his Autumn Budget statement, Mr Healey revealed that planned fuel duty price hikes would be put on hold with motorists continuing to struggle with rising bills.
The decision means that rises which were scheduled for January and March 2027 would be delayed in a major boost for cash-strapped road users that has been welcomed by industry. Tom Preston, Chief Executive Officer at Hippo Leasing stressed that extending the fuel duty cut is welcome and will give petrol and diesel drivers short-term relief at a time when they’re already struggling with higher household costs.
However, he also suggested that the average petrol and diesel road user could be set to save as much as £60 per year under the plan. Tom said: “For someone doing 10,000 miles a year in a 45mpg petrol car, the 5p cut is worth around £60 a year. Although the extension only pushes the rise back to next summer.”
Fuel prices are still causing a major headache for road users, with unleaded fuel still sitting around 173p per litre and diesel around 198p per litre. Last month, diesel prices soared above £2 per litre, breaking previous all-time highs.
Ahead of the Budget, motoring groups had demanded action around fuel duty to help motorists struggling at the pumps. However, fuel duty could still be set to increase in 2027, with Mr Healey only extending cuts until next summer.
Speaking in the House of Commons last week, Mr Healey said: “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.”
Reacting to the news, Sue Robinson, Chief Executive of National Franchised Dealers Association (NFDA) said: “Keeping fuel costs down is positive news for motorists and businesses alike. With many drivers and dealerships already facing significant financial pressures, measures that help reduce everyday motoring costs are important.”
