John Healey Freezes Fuel Duty and Raises Mileage Rates

Chancellor John Healey announced in his Budget to the House of Commons on Wednesday that the government will freeze fuel duty at 52.95p per litre and extend the 5p fuel duty discount until July 2027. These measures are intended to provide relief to motorists, hauliers, and farmers as the war in the Middle East and Russia's invasion of Ukraine continue to drive high pump prices.

As part of the Autumn Budget, Healey also updated business mileage tax relief. Drivers traveling over 10,000 business miles per year can now claim 35p per mile for petrol, diesel, or electric costs, an increase from the previous HM Revenue & Customs rate of 25p. Additionally, the temporary increase of the standard mileage rate to 55p per mile for the first 10,000 business miles, originally introduced by Rachel Reeves, has been made permanent.

Industry reactions were mixed. The RAC noted that while the freeze avoids worsening the current situation, it does not make filling up cheaper. The AA had previously urged the Chancellor to implement an additional 5p cut, a request that was not granted.