Spring Budget 2023: what does it mean for motorists?

The Government's 5p per litre reduction in fuel duty will remain in place for the next year, Chancellor Jeremy Hunt has announced as part of the Spring budget.

In his speech to Parliament, the Chancellor said that the duty drivers pay on fuel will remain at 53p per litre for another year. He also pushed back the planned increase in fuel duty in line with inflation, which was due to come into effect in April. 

This means fuel duty will stay at the current level until at least April 2024, in a bid to ease the financial strain on motorists at a time when the cost of living is on the rise. It means that fuel duty has been frozen for 12 years. 

At the current rate, fuel duty makes up 36% of the total cost of an average litre of petrol – currently £1.47, and 32% of a litre of diesel, which costs £1.66 on average.

When the 5p fuel duty cut was introduced in March last year, fuel prices were rising rapidly as a result of the Russian invasion of Ukraine. Average prices peaked in July, at £1.91 for petrol and £1.99 for diesel.

RAC head of roads policy, Nicholas Lyes, welcomed the Government’s decision to keep the fuel duty cut in place. He said “The cut has given drivers some much-needed relief in what has been the most torrid year ever at the pumps.”

Howard Cox, the founder of campaigning group Fair Fuel UK, added: “Today’s favourable fiscal announcement will be received very well by motorists, small businesses, low-income families, and truckers.”

The second big announcement for drivers in the Budget was extra funding for pothole repairs across England. The £200m funding scheme, which will launch over the next few weeks, will boost the amount of money local councils are given to resurface and repair country roads and smaller urban roads, for which they are responsible.

The Chancellor said the extra money would "help local communities tackle this problem".

Despite these announcements, some in the motor industry have suggested the Chancellor should have gone further. Nicholas Lyes said that the fund was "unlikely to make a big difference to the overall quality of our dilapidated local roads.

“Last year the Government spent £1.125bn on local roads in England, which is in stark contrast to the £7bn that went into major roads from car tax, despite local roads covering so many more miles.”

Lyes says the Government should significantly increase funding for local road maintenance and improvement, “so councils can resurface roads properly, rather than patching them up and hoping for the best”.

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