Fuel Duty Frozen: Chancellor Rachel Reeves’ £3 billion boost for taxi drivers and motorists
Updated: Oct 31
Chancellor Rachel Reeves has announced that fuel duty will remain frozen next year, at an estimated cost of over £3 billion to the Treasury.
This decision also keeps in place the 5p per litre cut introduced in March 2022.
In her Budget speech, Reeves described the move as a “substantial commitment”, signalling that any increase in fuel taxes would be ill-timed given current economic pressures.
She pointed out that the cost of living continues to weigh heavily on the public and raising fuel duty would be “the wrong choice for working people”.
The freeze will maintain the fuel duty at 57.95p per litre, a rate unchanged since 2011. With the 5p reduction from last year set to stay, consumers will continue to see some relief at the pumps. However, Reeves acknowledged the financial impact of the decision, noting that it would cost over £3 billion in the next fiscal year.
VAT will continue to be applied at 20% on top of fuel prices. Despite the difficult fiscal environment, Reeves emphasised that freezing fuel duty was the right call amidst ongoing global uncertainty and domestic financial strain.
More to follow…
