• Chancellor Rachel Reeves will delay the planned 5p-per-litre fuel duty increase until September 2026, maintaining the current lower rate until then.
  • From September 2026, the duty will rise by 1p per litre, with an additional 2p per litre in December 2026, phasing the full hike.
  • The move aims to ease cost-of-living pressures for households and transport-dependent businesses, though it draws criticism from environmental groups.

The UK government has decided to postpone the scheduled 5p-per-litre increase to fuel duty until September 2026, according to a person familiar with the matter. Instead of a single hike, the duty will be phased: a 1p rise in September 2026 and another 2p rise in December 2026, effectively unwinding the temporary 5p cut that has been in place since 2022.

The decision is part of Chancellor Rachel Reeves’ broader fiscal stability package, designed to shield drivers and businesses from an immediate price shock amid still-elevated global fuel prices and transport-cost volatility. The freeze until late summer 2026 will support short-term consumer spending and margins in the logistics and transport sectors, economists say.

Consumer groups welcomed the delay. A spokesperson for a major motoring organization noted that a sudden 5p jump would “disproportionately hit lower-income drivers and small businesses.” However, environmental NGOs criticized the extension, arguing it weakens the price signal on fuel consumption when the UK aims for net-zero targets. “This is another missed opportunity to align tax policy with climate goals,” said a climate policy analyst.

Politically, the move continues a cross-party trend of using fuel-duty freezes or cuts as a visible cost-of-living measure. Since the emergency 5p cut in 2022, successive chancellors have repeatedly extended it. The September 2026 timeline aligns with the next major fiscal statements, making the delay more a recalibration than a policy reversal.

In the longer term, analysts expect the phased restoration—totaling 8p above the current effective rate—to gradually push up fuel costs, potentially accelerating adoption of lower-carbon vehicles. Parallel adjustments to the Climate Change Levy and other energy taxes are also being recalibrated to balance industrial competitiveness with decarbonization.

Correction: An earlier version of this story incorrectly stated the full 5p hike would apply at once in September 2026. The duty will be phased, with 1p in September and 2p in December.