Measure
The government will extend the temporary 5 pence per litre cut to the main rates of Fuel Duty to 1 July 2026, and is also deferring the planned Retail Prices Index (RPI) increase until the same date.
It also extends, for the same period, the further 3.7 pence per litre red diesel duty cut along with the proportional reduction in red diesel duty resulting from the 5 pence per litre cut to the main fuel duty rate.
Motorists, hauliers and businesses using diesel, petrol or rebated fuels, including those in agriculture, construction and other sectors that rely on red diesel and similar rebated fuels. It will also impact manufacturers, importers and business consumers of these affected products.
The extended cuts apply until 30 June 2027. Fuel duty rates revert to March 2022 levels and are uprated in line with RPI from 1 July 2027. Red diesel duty will then return to its pre-March 2022 rate and be uprated in line with RPI from 1 July 2027.
Extending the temporary 5 pence per litre cut for a further six months continues a pattern of repeated short-term extensions since the cut was first introduced in 2022. However, given the increase in the cost of fuel at the pumps due to the high price of oil, revenues from an increase in VAT revenues will partly offset this measure and the deferral of the RPI uprating.