UK Government Extends 5p Fuel Duty Cut to Year-End Over Middle East War Impact
Prime Minister Keir Starmer announced in the House of Commons that the 5p per litre fuel duty cut, initially implemented by the previous Conservative administration, would remain in effect until the end of 2024. The move responds to significantly increased petrol and diesel prices, which have climbed since the onset of the US-Israel conflict in Iran, impacting global oil and liquefied natural gas supplies. Petrol prices averaged 158.52p per litre on Monday, marking the highest point since the Iran war began.
Conservative leader Kemi Badenoch acknowledged the extension as a government “U-turn”, claiming her party had advocated for the measure in March. The fuel duty reduction was initially introduced in March 2022 for a 12-month period, subsequently receiving repeated extensions.
Beyond the standard fuel duty, Starmer also detailed plans to reduce the rate on red diesel by over a third, bringing it to 6.48p per litre from mid-next month through to the year's end. This is intended to assist farmers utilising the fuel in agricultural machinery. Furthermore, a 12-month exemption on vehicle excise duty for Heavy Goods Vehicles (HGVs) was announced, a measure the government claims will alleviate supply chain expenses for the haulage sector and potentially mitigate consumer price increases. This exemption is projected to save hauliers approximately £600 per typical heavy lorry.
However, Simon Williams, head of policy at the RAC, raised concerns about future policy, questioning whether drivers face a sudden 5p increase next spring, a new phased approach, or a complete abandonment of the planned increase.
