Fuels: Excise Duties
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the continued freeze in fuel duty on (a) CPI inflation and (b) the cost of living.
Answered by Dan Tomlinson
The extension of the temporary 5 pence per litre cut to fuel duty rates until 31 December 2026 will help to reduce pressure on costs at the pump and provides certainty to motorists.
The measure will have a direct effect on the Consumer Price Index (CPI); it is expected to reduce CPI by 0.04 percentage points in quarter 4 2026.
In total, the decisions taken since the 2024 general election to freeze fuel duty will save motorists 11p per litre or £120 for the average car.
Further details on the impacts of this measure, including on households and businesses, are set out in the Tax Information and Impact Note, available here:
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