The AA has urged the Government to take further action on fuel duty as high petrol and diesel prices continue to put pressure on drivers across the UK.
Chancellor John Healey is due to deliver his first Budget on October 28, with motorists hoping for measures to ease the cost of running a car. The AA wants the Government to protect the existing fuel duty reduction and introduce an additional 5p cut per litre.
Fuel prices put pressure on UK drivers
Diesel prices have reached record levels in recent months amid rising oil costs linked to the conflict involving the United States and Iran. According to the figures supplied by the AA, diesel reached 200.01p per litre earlier in October, meaning a typical 55-litre tank would cost around £110 to fill.
Petrol has yet to reach its all-time price peak, but drivers across the country are still facing substantial bills at the pumps. The pressure also extends beyond private motorists, with higher fuel costs affecting businesses that depend on road transport.
The AA previously reported that more than 2,500 filling stations across the UK were charging at least £2 per litre for diesel at the start of October.
What the AA wants from the fuel duty Budget
The AA is calling for the Government to retain the existing 5p-per-litre fuel duty reduction and cut duty by a further 5p. The current reduction was introduced following Russia's invasion of Ukraine and has been extended by successive Conservative and Labour governments.
The Government previously announced an extension of the cut until the end of 2026. Under the announced timetable, fuel duty is due to rise by 3p per litre on January 1, 2027, before the remaining reduction is withdrawn by March.
The AA argues that removing the existing support while fuel prices are high would add further pressure to household budgets. Its proposed additional reduction could provide further relief if retailers pass the benefit on to customers.
How much could drivers save?
The AA estimates that an additional 5p reduction in fuel duty could translate into a saving of around 6p per litre at the pumps, including the associated VAT effect.
For a driver filling a 55-litre tank, that would mean a saving of approximately £3.30 per visit. Drivers who fill up frequently could benefit more over the course of a year, although the actual saving would depend on how much of the reduction retailers pass on.
The AA also points out that higher fuel prices affect the wider economy. Transport costs feed into the price of deliveries and other goods, potentially adding to the pressure on household finances even for people who rarely drive.
What the Government says about fuel duty
AA president Edmund King has called on the Chancellor to act, arguing that motorists and businesses need relief from rising fuel costs. He also highlighted the additional VAT revenue generated when the underlying price of fuel increases, suggesting the Treasury should consider that income when deciding its Budget measures.
The Government has said that decisions on fuel duty and other taxes will be announced in the Budget.
Will the Budget bring relief for motorists?
Drivers will have to wait until October 28 to find out whether the Chancellor will extend the existing cut, introduce a further reduction or stick to the announced timetable for increases.
Our view is that keeping the current 5p cut in place should be the minimum ambition while fuel prices remain elevated. An additional reduction would offer welcome help, although its impact would depend on how much reaches motorists at the forecourt.
The AA's proposal is straightforward and offers a measurable potential saving on every fill-up. With diesel costs placing a heavy burden on drivers and businesses across the UK, the Chancellor has a clear opportunity to provide some relief. Whether the Treasury is willing to absorb the cost is the big question left for Budget day.