The autumn budget – fuel duty remains frozen

The autumn budget has been announced today, as Rachel Reeves announced changes to benefits, inheritance tax and national insurance. For the transport industry – or any business that relies on road transport to operate – there was a great deal of speculation about the possible impact of a rise in duty.

Fuel duty has been frozen at 57.95 pence per litre since 2011. The 5 pence-per litre discount has been in place since 2022, bringing it down to 52.95 pence. Despite rumours that drivers should prepare for a rise of 7 pence per litre, today’s announcement confirmed that fuel duty will be frozen for the next twelve months. The 5 pence-per-litre discount has also been extended for a year.

Speaking about the announcement, Robin Shek, Customer Success Manager at The Fuel Store, commented: “This is good news for our customers. Keeping the fuel duty cap in place is a significant measure aimed at stabilising costs for businesses that are heavily reliant on fuel, such as logistics, delivery services, and transport. This is critical for businesses that operate on tight margins.”

There have long been concerns across industry that a rise in fuel costs could be catastrophic – particularly for the haulage industry, which already operates on extremely tight margins. A cap on fuel duty helps these operators remain competitive without having to raise prices or reduce service quality.

Robin continued, “Businesses should be mindful that this cap could be temporary. Long-term planning for fuel alternatives and cost efficiencies will likely remain a focus for many companies in the fleet-dependent sector. However, it offers immediate relief and predictability for UK businesses that rely on fuel, allowing them to manage costs more effectively in the short term.”

Reeves also pledged an additional £500m for road maintenance and ongoing tax incentives to purchase electric cars. EVs will retain Benefit in Kind tax rates for company car drivers, and, while no longer exempt, they will have more favourable first-year tax rates than petrol and diesel-powered cars.

Robin added “The government has reiterated its goal to phase out sales of new petrol and diesel vehicles. For many businesses, especially those with large fleets, this long-term target reinforces the need to start planning for an eventual shift to EVs.”