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Is Chancellor Reeves about to increase fuel duty?

By Jodie Chay Oneill | May 6, 2025

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Chancellor Rachel Reeves is under pressure to reconsider her fuel duty policies in light of the current rate of Government spending vs available funds

Is Chancellor Reeves about to increase fuel duty?

Chancellor Rachel Reeves is from some left-wing commentators to reconsider her stance on fuel duty, amid concerns about the cost-of-living crisis and future government revenues.

Fuel duty in the UK has been frozen for 15 years, with a temporary 5p per litre cut introduced in 2022 to help with rising fuel costs. While this freeze has benefited drivers, it has led to a decrease in government revenue. In her recent Budget, Chancellor Reeves decided to continue both the freeze and the 5p cut, a move that, while popular with motorists, is expected to cost the government over £3 billion annually.

Looking ahead, the UK's goal to ban new petrol and diesel cars by 2030 presents a serious challenge. With electric vehicles (EVs) not contributing to fuel duty, forecasts suggest a potential £9 billion shortfall in fuel tax revenues by 2030.

Despite the freeze, there is increasing pressure on Reeves to ensure the long-term sustainability of fuel duty revenues. 

The logistics sector, represented by groups like Logistics UK has previously highlighted concerns around any increase in fuel duty, stating fuel is the biggest cost for logistics businesses and a rise could increase costs for consumers and slow economic recovery.

In her last Budget speech, Chancellor Reeves reaffirmed the freeze stating that increasing fuel duty would be "the wrong choice for working people," especially given the high cost of living and global economic uncertainty.

Let's see if that's still the case when she next presents the famous red briefcase... 

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