Petrol and diesel drivers celebrate as fuel duty freeze extended again to save Britons £60 a year

WATCH: Quentin Willson on the Chancellor's fuel duty freeze

GB NEWS
Felix Reeves

By Felix Reeves


Published: 26/03/2025

- 13:13

Updated: 26/03/2025

- 14:01

Drivers will continue to benefit from the fuel duty freeze until March 2026

Petrol and diesel drivers have been handed a lifeline with an extension to the freeze on fuel duty, which will keep forecourt prices low for hard-pressed Britons.

The five pence per litre cut for fuel duty was first introduced by Conservative Chancellor Jeremy Hunt in 2022 following the Russian invasion of Ukraine, which sent global oil prices spiralling.


Chancellor Rachel Reeves announced in the Autumn Statement that the Government would extend the freeze on the 5p per litre fuel duty cut.

Speaking last October, she said the Government was protecting motorists by freezing fuel duty for another year, which would "support hard-working families and businesses".

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Petrol station and a petrol pump

Petrol and diesel drivers have seen the fuel duty freeze extended until 2026

GETTY/PA

It has been extended every year since, with Rachel Reeves pledging to cancel the planned increase in 2025-2026, which would have risen in line with inflation.

Estimates suggest that the average car driver will save £59 per year ahead of the fuel duty freeze ending on March 22, 2026.

According to RAC Fuel Watch, drivers are paying an average of 136.6p per litre for unleaded petrol and 143.31p for diesel.

Fuel costs are expected to fall in the coming weeks, especially as the global price of crude oil continues to drop, with drivers expected to benefit from cheaper wholesale costs.

In recent months, experts have called on supermarkets and major retailers to ensure lower wholesale costs are passed on as savings at the pumps.

It remains to be seen whether Chancellor Rachel Reeves will extend the fuel duty freeze beyond March 2026, although pressure from drivers and the motoring industry could see the measure extended.

One of the most fervent campaigners for fuel duty, Howard Cox, admitted that he was "shocked" to have seen Chancellor Rachel Reeves and Labour extend the freeze last October.

He said that extending the freeze on fuel duty was "at the core of a laudable journey to economic growth", before warning that the Chancellor should not rest on her laurels.

Speaking in October, he said: "Start incentivising the UK's 37 million drivers and stop seeing them as an easy cash cow."

A fuel duty hike may be inevitable if more drivers continue to switch to electric vehicles, since the revenue raised from fuel duty receipts will fall with fewer internal combustion engine vehicles on the road.

Other suggestions have included the introduction of pay-per-mile car tax changes to ensure all road users are paying an equal share to maintain highways.

This has frequently been touted as the best solution to fill in the £30billion black hole which will be caused by people using less petrol and diesel.

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Petrol station

Petrol and diesel prices are expected to continue falling in the near future

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Proposals have been outlined which could see motorists living in rural areas receiving a certain amount of "free miles" to help them access services and amenities without being unfairly charged.

An HM Treasury spokesperson previously told GB News: “We have no plans to introduce road pricing.

"We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”