Fuel duty frozen until at least the end of 2026
5p cut to fuel duty will remain in place to mitigate rising petrol prices as a result of the war in Iran...
The 5p cut on fuel duty that was due to be scrapped in September has been extended until at least the end of 2026, the Government has announced.
The decision comes in an attempt to protect buyers from rising petrol and diesel prices as a result of the Iran war. Originally introduced by the previous Conservative government in 2022, the cut reduced fuel duty down to the current rate of 52.95p.
As announced in 2025’s Autumn Budget, this was due to be scrapped by spring next year; under Chancellor Rachel Reeves’ previous plans, a rise of 1p was due in September, followed by a further 2p in December, with the full 5p rise to be completed in the following months.
However, the Government announced today (20 May) that the freeze of the current rate would be extended once again because the war in Iran continues to affect supplies of oil and natural gas globally.
Prime Minister Keir Starmer said: “I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances. Because when global events drive up prices, it’s working people who feel it first.
“That’s why this government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.”
The average price of petrol reached its highest level since the start of the Iran war this week, hitting 158.73p per litre, according to the RAC.
Reeves said: “The war in Iran is pushing up fuel prices here at home but after strong growth at the beginning of the year, I am stepping in to protect people at the pump
“By protecting households and businesses we are building a stronger and more secure economy for Britain. That is the right economic plan.”
But questions remain over how the cut in fuel duty will be handled by the Government after the end of 2026.
“The big question is now: what will happen next year and will drivers be hit with the full 5p in one go in the spring, will a new phasing be agreed, or will the Government even abandon an increase altogether?” said Simon Williams, head of policy at the RAC.
The Prime Minister also announced a 12-month holiday on vehicle excise duty (VED) for hauliers, who will pay £1 at renewal time instead of up to £912.
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