Fuel Duty is one of the costs that makes up the price motorists pay for petrol and diesel, so changes to the tax can affect drivers and businesses across the UK. The October 2026 Budget has updated the timetable for the temporary Fuel Duty reduction. This guide explains what has been announced, who is affected and what the changes mean for fuel costs over the coming months.
Change at a glance
The 5p per litre Fuel Duty reduction stays in place until 30th June 2027. The announced rate increase is scheduled for 1st July 2027.
When
1st January to 30th June 2027
The extension keeps the reduced rate in place for a further six months. The next scheduled rate change is 1st July 2027.
Petrol and diesel duty
52.95p per litre
The same main Fuel Duty rate applies to both petrol and diesel until 30th June 2027.
Where
Across the UK
The Fuel Duty measure applies UK-wide. There is no separate rate for Scotland, England, Wales or Northern Ireland.
Who is affected?
Motorists, van drivers and businesses that buy petrol or diesel. The change also matters to other users of fuels covered by Fuel Duty.
Do you need to do anything?
No. There is no application or action for drivers. Fuel Duty is included in the price charged by fuel retailers.
Last checked: 3rd November 2026.
What is changing with Fuel Duty?
The October 2026 Budget extends the existing temporary 5p-per-litre cut in the main rates of Fuel Duty for a further six months. The reduced rate will therefore remain in place through 30th June 2027, instead of the planned 5p reversal from January. The government has also deferred the planned inflation-linked increase until 1st July 2027.
For standard petrol and diesel, the published rate is 52.95p per litre through to 30th June 2027. This is the same rate that has applied since the 5p cut was introduced in March 2022. The extension does not give drivers a new 5p discount at the pump. It prevents the existing reduction from being withdrawn during the first half of 2027.
Why has the 5p Fuel Duty cut been extended?
The Budget says fuel prices remain high and that the extension is intended to give motorists and businesses some breathing space. It notes that diesel exceeded £2 per litre in October 2026, following higher global fuel prices.
The original 5p cut was introduced in March 2022 as a temporary response to rising fuel costs. It has since been extended several times. The October 2026 decision is another extension, rather than a new reduction in the amount of duty charged.
Fuel Duty dates: what happens next?
The Fuel Duty timetable
23rd March 2022
The 5p cut is introduced
The main rates of Fuel Duty are reduced by 5p per litre as a temporary measure.
January 2027: previous plan
The reversal is cancelled
Before the Budget, the government planned to begin reversing the temporary 5p per litre cut from January 2027. The Budget cancels that planned 5p reversal and keeps the reduced rate in place through to 30th June 2027. It also defers the planned inflation-linked increase until 1st July 2027.
1st January to 30th June 2027
The reduced rate continues
Petrol and diesel Fuel Duty remains at 52.95p per litre for the six-month extension.
From 1st July 2027
The 5p reduction is scheduled to be reversed
The government plans to return rates to their pre-cut level and uprate them in line with RPI inflation. The Budget rate table lists 60.59p per litre for petrol and diesel.
Will petrol and diesel become 5p cheaper?
No. The extension does not reduce Fuel Duty by another 5p. It keeps the existing reduced rate in place for longer, avoiding the increase that had been planned for January 2027. Petrol and diesel have the same main Fuel Duty rate in the published schedule: 52.95p per litre until 30th June 2027, with 60.59p per litre listed from 1st July 2027.
A change in Fuel Duty does not guarantee an identical change in the price displayed at a petrol station. Fuel Duty is one part of the pump price, alongside wholesale fuel costs, VAT, distribution costs and the retailer’s pricing. The government sets the duty rate, but it does not set the price charged by every petrol station.
How much does 5p per litre mean for a tank of fuel?
The figures below show the value of a 5p per litre difference in Fuel Duty. They are simple calculations of the duty reduction, not a promise that the price on the pump will be 5p lower or that the full amount will be passed on to drivers.
The 5p-per-litre difference
20 litres
£1.00
20 × 5p
40 litres
£2.00
40 × 5p
50 litres
£2.50
50 × 5p
These totals show the difference in Fuel Duty alone. VAT and changes in wholesale costs or retailer prices can affect the final amount paid at the pump.
What happens to Fuel Duty from 1st July 2027?
The extension ends on 30th June 2027. From the following day, the government plans to reverse the temporary 5p cut and increase Fuel Duty in line with Retail Prices Index (RPI) inflation. This is not just a return to the old rate of 57.95p per litre.
The Budget’s published rates table lists the main rate for both unleaded petrol and diesel as 60.59p per litre from 1st July 2027. That is 7.64p more per litre than the 52.95p rate applying up to 30th June. The difference includes the 5p reversal and the planned inflation-linked increase.
The government says it will introduce legislation for the change. The published timetable is therefore the announced policy, and the final legal position will depend on the legislation being made. The Budget does not set out a series of smaller monthly increases after June. It lists the new main rate from 1st July.
Scheduled rate from 1st July 2027
60.59p per litre
Compared with 52.95p per litre up to 30th June 2027. This is the published Fuel Duty rate, not a forecast of the exact change in pump prices.
What about red diesel and other rebated fuels?
The Budget also extends the separate 3.7p-per-litre reduction in duty on red diesel for a further six months, through to 30th June 2027. The published rates table also lists reduced rates for certain other rebated fuels, including biodiesel and kerosene used in specified machinery.
Red diesel is subject to different rules and rates from ordinary road diesel. The published rate for marked gas oil is 6.48p per litre until 30th June 2027, with 11.65p per litre listed from 1st July. These rules matter to eligible users such as some agricultural and rail-freight operators. Red diesel cannot be used as a cheaper substitute for ordinary road diesel in vehicles on public roads unless a specific legal entitlement applies.
Who is affected by the Fuel Duty extension?
Private motorists
Anyone buying petrol or diesel benefits from the existing lower duty rate remaining in place until the end of June 2027, although the effect on pump prices depends on other costs too.
Van drivers and people who drive for work
Drivers who cover high mileages may use more fuel, so a per-litre duty change can add up across regular journeys. The July 2027 rate increase is particularly relevant when planning vehicle running costs.
Businesses and fleet operators
Businesses that buy petrol or diesel for cars, vans and other vehicles will continue to pay duty at the reduced rate until 30th June 2027. The announced July increase should be considered in future fuel budgets.
Eligible red diesel users
Some agricultural, rail-freight and other eligible machinery users benefit from the separate extension to the 3.7p reduction on specified rebated fuels.
Does the change apply throughout the UK?
Yes. Fuel Duty is a UK-wide tax, and the Budget documents state that the measure applies across the UK. The main petrol and diesel rates are the same in Scotland, England, Wales and Northern Ireland, with no separate devolved timetable for this extension. The same published rates therefore apply wherever drivers buy standard petrol or diesel in the UK.
Do motorists need to do anything?
No. Drivers do not need to apply, register or contact HMRC. Fuel Duty is charged within the fuel supply chain and forms part of the price paid at the pump. The extension and the later rate change are handled through the duty rates applied to fuel.
If you use a vehicle for work, the separate HMRC mileage allowance rules may also be relevant to how you claim tax relief or receive mileage payments. Those rates are not the same as Fuel Duty and are not changed by this extension. See our guide to HMRC mileage rates for 2026 to 2027. If you are comparing the cost of petrol or diesel with electric motoring, you can also read about the planned electric car mileage tax from April 2028.
Frequently asked questions
Quick answers about the 5p Fuel Duty cut and the July 2027 rate change.
What did the Budget announce?
It keeps the existing 5p-per-litre reduction in place through 30th June 2027 and delays the planned inflation-linked increase until 1st July 2027.
When does the 5p cut end?
30th June 2027 is the final day of the extended period. The government plans to reverse the cut and uprate Fuel Duty from 1st July 2027.
Will petrol and diesel become 5p cheaper?
No. Drivers are not getting a new 5p reduction. The existing duty cut is simply being maintained for longer, and pump prices also depend on wholesale costs, VAT and retailers.
What will Fuel Duty be from 1st July 2027?
The Budget rate table lists 60.59p per litre for both petrol and diesel from 1st July 2027, compared with 52.95p per litre until 30th June. The government says it will legislate for the change.
Does the Fuel Duty change apply in Scotland?
Yes. Fuel Duty is a UK-wide tax, so the same main petrol and diesel rates apply in Scotland, England, Wales and Northern Ireland.
Do I need to claim the 5p reduction?
No. There is no application process for motorists. The duty rate is applied before fuel is sold at the pump.
Are red diesel rates changing too?
The separate 3.7p reduction for certain rebated fuels, including red diesel for permitted uses, is also extended until 30th June 2027. The published rate for marked gas oil is 11.65p per litre from 1st July 2027.
Related motoring guides
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