Fuels: Excise Duties
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the 5p cut to fuel duty on levels of social mobility in rural areas.
Answered by Dan Tomlinson
The Chancellor considers a wide range of impacts when taking decisions on tax policy. At Budget 2025, the Government announced that the 5p cut in fuel duty would be extended until the end of August 2026, with rates then gradually returning to March 2022 levels by March 2027. The planned increase in line with inflation for 2026/27 will also not take place, with RPI uprating resuming from 2027/28 onwards.
The Government’s decision on fuel duty will save the average car driver £49 in 2026/27. Those driving more than average, which includes drivers in rural communities, will generally experience larger savings.
The Rural Fuel Duty Relief Scheme provides a 5p per litre reduction to motorists buying fuel in certain areas. The areas included in the scheme demonstrate certain characteristics such as: pump prices much higher than the UK average; remoteness leading to high fuel transport costs from refinery to filling station; and relatively low sales meaning that retailers cannot benefit from bulk discounts.
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