Andy Burnham and John Healey have been told to make one decision about fuel duty rates ahead of the Budget next month. Mr Healey is set to present his first Budget as Chancellor at the end of October, with Rachel Reeves and Keir Starmer’s fuel duty move one of the standout issues.
Petrol and diesel fuel duty was expected to increase from September 2026, but Reeves and Starmer decided to extend the current freeze until the end of the year.
However, the delay means that the current legal default is for fuel duty rates to gradually return to March 2022 levels by March 2027. This will see road users hit with a 3p per litre fuel duty hike in January before a further 2p increase in March.
HMRC has stressed that the government “will confirm final rates at Budget 2026”, meaning the issue is likely to be addressed by Mr Healey in his statement. However, RAC senior policy officer Rod Dennis has called on the Government to reconsider rising costs and retain the current cut for a bit longer after further price hikes on petrol and diesel fees.
Rod said: “The latest price rises throw into sharp focus just how exposed UK drivers can be to events thousands of miles away, and will likely increase calls for the Chancellor to demonstrate support for households already struggling with the rising cost of living.
“As things stand, fuel duty - which, together with tax, accounts for half of the cost of every litre of petrol we buy - is set to start rising from January but we believe there is a very strong case for leaving it at its current level, at least until the end of the Parliament.”
According to the RAC, the average price of unleaded petrol has increased by 5p a litre in a week to reach 167.17p. They explained that the current rates are the highest petrol fees since September 2022.
Meanwhile, diesel has also increased by 5p per litre, with road users paying around 188.63p per litre to fill up. The current rates are only the most expensive diesel fees since April.
FairFuelUK has also called on Labour to consider a freeze in fuel duty fees for the lifetime of the Parliament, or even cut costs.
Howard Cox, founder of FairFuelUK, previously said: “This fiscally short-sighted Government, under Andy Burnham, and following Keir Starmer's tenure, continues to show a deliberate reluctance to support drivers or ease business transport costs by cutting fuel duty.”