The news will come as a relief to drivers who feared an increase in fuel duty next year. The rise would have meant fuel duty increasing by 7ppl. The move will save the typical motorist £60 per year.
Reeves said: “To retain the 5p cut and to freeze fuel duty again would cost over £3bn next year. At a time when the fiscal position is so difficult, I have to be frank with the house that this is a substantial commitment to make.
“I have concluded that in these difficult circumstances, while the cost of living remains high and with the backdrop of global uncertainty, increasing fuel duty next year would be the wrong choice for working people.”
The current 52.95p fuel duty rate included in the price you pay for diesel and petrol was extended by 12 months in the Spring Budget of 2023 and extended further in the final Budget by the previous Conservative Government in March.
The Chancellor had been under pressure to keep fuel duty rates frozen, with a fuel duty petition delivered to Downing Street last week.
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Howard Cox, founder of FairFuelUK, said: “I am delighted that Rachel Reeves has listened to FairFuelUK supporters and her party MPs’ constituents. She finally recognises that keeping fuel duty frozen is at the core of a laudable journey to economic growth.
“So, Rachel, that’s a great start. But please don’t rest on your laurels. Let’s build the first-ever road-user transport strategy that benefits the economy without your party’s false and emotional, scientifically baseless belief that the UK is the only country to save the planet and the motorist is to blame for all the environmental ills. That costly brainwashing must stop now. Start incentivising the UK’s 37 million drivers and stop seeing them as an easy cash cow.”
Matthew Briggs, CEO at Right Fuel Card:Edenred, said: “We welcome the announcement of a continued fuel duty freeze and an extension of the 5-pence-per-litre price cut. Whilst, positively for consumers, fuel prices are on a downward trajectory, there is still work to be done to support those struggling to cover costs.
“Whilst wholesale fuel prices are out of the Government’s hands, we’re hopeful that prices continue to fall for the rest of the year and beyond, as this would benefit both customers and businesses.”
New tax on vapes
In an attempt to discourage non-smokers and young people from taking up vaping, the Government is introducing a vaping duty for the first time. A flat duty rate of £2.20 per 10ml of liquid will come into force on 1 October 2026.
There will also be a one-off tobacco duty rise to keep the incentive to choose refillable vaping over smoking.
