Overview
- Chancellor John Healey confirmed in his Autumn Budget on Wednesday that the temporary 5p-per-litre reduction introduced in 2022 will remain in place until at least July 2027, cancelling a previously signalled 5p rise due on January 1.
- The extension avoids an immediate tax hike for motorists and businesses but does not lower pump prices because wholesale oil costs and other charges still drive forecourt rates.
- Motoring groups such as the AA and the RAC criticized the move as insufficient and urged a deeper cut, with calls for an extra 5p reduction targeted at diesel users who power many businesses.
- Critics also pointed to a reported £1.7 billion rise in VAT receipts from higher pump prices since late February and said those extra funds could be used to offer bigger or more targeted relief.
- The 5p measure dates to 2022 and its prolonged freeze makes this the 16th consecutive year of some form of duty freeze, leaving the July deadline as the next key moment for whether drivers face higher charges.