Fuel duty freeze extended until the end of the year
Summary
The UK government has extended the freeze on fuel duty, keeping the 5p tax cut on petrol and diesel until the end of the year instead of ending it in September. This decision comes after rising fuel prices caused by conflicts in the Middle East and is also accompanied by reduced taxes on red diesel and a temporary tax break for heavy goods vehicles.Key Facts
- The 5p cut on fuel duty was introduced in March 2022 by the Conservative government to help with rising fuel prices.
- The fuel duty cut was supposed to end after 12 months but has been extended multiple times.
- The freeze on fuel duty will now last until the end of the year, not just until September.
- Rising fuel prices have been influenced by the war between the US and Israel in Iran, which disrupted global oil and gas supplies.
- The government plans to reduce the fuel duty on red diesel, used mainly in farming equipment, by over one-third until the end of the year.
- A 12-month holiday on vehicle excise duty (a tax on vehicles) will apply to heavy goods vehicles (HGVs) to help with higher supply chain costs.
- The average petrol price reached 158.52 pence per litre recently, the highest since the start of the Iran war.
- Industry experts have raised questions about the fuel duty policy after this year, including whether prices will rise sharply or if further extensions will happen.
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