Rachel Reeves scraps fuel duty hike to ease cost-of-living pressure
Chancellor Rachel Reeves is set to scrap a planned fuel duty increase in her Autumn Budget. The move comes as pressure mounts from campaigners and small businesses struggling with high fuel costs. Diesel prices remain above £1.55 per litre in many areas, adding financial strain.
The decision follows months of calls for tax relief. FairFuelUK, led by founder Howard Cox, has pushed for cuts to all fuel taxes to ease economic pressure. Over 71,000 of its supporters emailed MPs demanding the Chancellor abandon the planned hike. A separate petition, signed by more than 148,000 people, will be delivered to the Treasury, urging an immediate reduction in fuel duty.
Since tensions escalated in the Gulf, UK drivers have paid an estimated £3 billion extra at the pumps. Despite this, Britain has not followed over 40 other countries that cut, suspended, or capped fuel taxes after the Iran conflict began. The Office for Budget Responsibility still projects a £2.2 billion rise in fuel duty revenue by 2027-28, once the current 5p cut is reversed and inflation-linked increases return. The Chancellor’s retreat on the duty rise will offer short-term relief to Britain’s 5.5 million small businesses. Many have struggled to manage fuel costs, unable to absorb or pass on the expense without squeezing profits.
The cancellation of the fuel duty increase marks a temporary victory for small firms and drivers. Prices at the pump remain high, and long-term tax policies could still push costs up further. The Treasury’s decision reflects growing pressure but leaves broader fuel tax reforms unresolved.
