Fuels: Excise Duties
The question
To ask the Chancellor of the Exchequer, if she will make a comparative estimate of the potential impact of maintaining levels of fuel duty at the Autumn Budget 2024 on the cost of transporting goods by (a) rail freight and (b) road haulage.
Answered by James Murray
At Autumn Budget 2024, the Government announced continued support for people and businesses by extending the temporary 5p fuel duty cut and cancelling the planned increase in line with inflation for 2025/26.
This maintains fuel duty rates, including those for red diesel, at the levels set in March 2022 for an additional 12 months and represents an average saving of nearly £1,100 for heavy goods vehicles in 2025/26.
In 2020, the previous Government announced that the red diesel entitlement would be withdrawn from most sectors from April 2022. In the rail sector, the previous Government concluded that the removal of the red diesel entitlement for passenger or freight journeys risked creating perverse environmental outcomes, namely transferring rail freight or passengers to more polluting lorries, coaches and cars if costs rose. Whereas full duty diesel is taxed at 52.95p per litre, red diesel is taxed at 10.18p per litre.
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