Industry Groups Urge UK Government to Scrap Fuel Duty Hikes

The Road Haulage Association and other industry groups are urging the British government to scrap a planned 3p-per-litre fuel duty increase scheduled for January 2026. This demand comes as fuel prices surge due to crude oil exceeding $100 a barrel, driven by supply disruptions and conflict involving the United States, Israel, and Iran.

On September 22, average diesel prices rose to 196.1p per litre, nearing the all-time record of 199.1p set in July 2022, while petrol averaged 172.4p. The Automobile Association is calling for the government to extend and increase the current 5p-per-litre fuel duty reduction to support rural residents and small businesses. Luke Bosdet of The Automobile Association noted that rising pump prices have simultaneously boosted VAT receipts for the Treasury.

Industry leaders warn that tax increases amid these price spikes will inflate costs for households and businesses. The Road Haulage Association described scrapping the planned rises in January, March, and April as the cheapest inflation control available to the government. Liberal Democrat leader Sir Ed Davey argued that the government should return exchequer gains from high oil prices to the public.

Chancellor John Healey is expected to address fuel duty fees in the Autumn Budget at the end of October. However, The Automobile Association warned that any further tax cuts may not be passed to consumers by fuel retailers, citing previous Competition and Markets Authority criticism of elevated margins in the road fuel trade.