Chancellor John Healey has extended the temporary 5p fuel duty cut for another year, meaning the current rate of 52.95p per litre on petrol and diesel will remain in place until January 1, 2028.
The freeze was announced in the Budget today, pushing back plans to end the cut that had been due to begin in September 2026. Under the previous schedule, the duty would have been phased out in stages of 1-2p at a time until spring 2027.
Extension details
The 5p cut, first introduced in 2022 by the Conservatives, was previously extended by Labour. It had been due to end from September 2026, but the new Chancellor has now extended it for another year.
This means the current temporary fuel duty level, which adds 52.95p to every litre of fuel (with VAT charged on top), will not rise to 57.95p by next March as previously planned. Instead, the existing 5p cut will continue through the rest of 2027.
Government statement
Chancellor John Healey told MPs: "Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years.
"With the war in the Middle East still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers, and farmers.
"And for anyone who relies on their car for their work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and making permanent the increase to the standard mileage rate introduced earlier this year."
The extension was confirmed by Andy Burnham and Chancellor John Healey, following earlier extensions by former leaders Sir Keir Starmer and Rachel Reeves before they left office.
