Mark 28 October in the diary. That's the date of the next UK Budget, and buried among the bigger headlines will be a decision that affects almost every driver in the country: what happens to fuel duty.
A quick recap for anyone who hasn't been following it closely. Fuel duty itself has effectively been frozen since 2011, but on top of that, a temporary 5p per litre cut has been in place since 2022, and it's been extended four separate times since then, each time right before it was due to lapse. That cut is currently scheduled to expire on 31 December 2026. Whether it gets extended a fifth time, left to disappear, or something in between, will be decided at the Budget, just nine weeks before the deadline.
It's not a trivial decision for the Treasury either. Government spending commitments announced over the past year have put pressure on the public finances, and fuel duty is routinely mentioned by independent analysts as one of the areas under consideration when the Chancellor needs to find additional revenue. At the same time, removing a fuel duty cut is never a politically comfortable move, which is presumably part of why it's survived four previous Budgets already. If the cut isn't renewed, the original plan floated for letting it unwind was a staged approach, roughly 1p in one month followed by 2p increases in each of the following two, starting from January.
What would that actually mean at the pump? Because VAT is charged on top of duty, a 5p increase in duty works out closer to 6p a litre once tax is applied to tax. For a typical 55-litre fill-up, that's roughly £3.30 extra each time. For someone filling up every couple of weeks, that adds up to somewhere in the region of £85 extra across a year, which is a meaningful number for a lot of household budgets without being a dramatic one.
It's also worth keeping some perspective. Regional price differences at the pump, which can run anywhere from 10p to 20p a litre between the cheapest and most expensive forecourts in the same area, already dwarf the impact of a potential duty change. If you're not already in the habit of checking prices across a couple of nearby filling stations before you fill up, that's likely to save you more over a year than whatever the Budget decides either way.
For now, nothing has actually changed, and nothing will until 28 October at the earliest. But if you're budgeting for next year's running costs, whether for your own car or for vehicles you manage for your business, it's sensible to build in the possibility of a modest rise in fuel costs from January rather than assuming the current cut simply carries on indefinitely.
This is one of those stories that's easy to overlook because none of the individual numbers sound dramatic on their own. A few pence a litre doesn't make headlines the way a big tax change does. But for anyone running a car, a van, or a small fleet on a tight annual budget, these incremental shifts add up over twelve months in a way that's worth planning for rather than being caught out by. If you lease rather than own, it's also a reminder that fuel and running costs sit outside the monthly payment, so it's worth factoring them into your overall cost of motoring when you're comparing options.
We'll keep an eye on the announcement and update this once the Chancellor has actually spoken.