Spring Statement: What is fuel duty, how much is it in the UK, and will Rishi Sunak cut fuel duty?


Rishi Sunak is expected to announce a fuel duty cut in today’s Spring Statement. Photo: anyaberkut / Getty Images / Canva Pro.

Pressure is building on Rishi Sunak to unveil new plans to help struggling households as he is set to vow to “stand by” British families amid the deepening cost of living crisis.

The Chancellor, who will deliver his spring statement on Wednesday, will link strengthening the UK economy to opposing Russian President Vladimir Putin’s invasion of Ukraine.

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On Wednesday morning it was announced that UK inflation had been set soaring higher in February.

The expected fuel duty cut is an effort to relieve fuel prices in the fact of continued cost of living increases. Photo: IngaNielsen/Getty Images/Canva Pro.

The rise was higher than expected and comes after prices lifted across food, clothing and footwear and a range of products and services.

It’s expected that Mr Sunak will announce a fuel duty cut to relieve the pressure on fuel costs – but what will this mean in practice?

Here’s what fuel duty is and what a potential cut could mean for you.

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What is fuel duty?

Fuel duty is an excise duty that you pay as part of the cost of fuel whenever you fill up.

As such, it affects the price of petrol and diesel.

How much is fuel duty in the UK?

Fuel duty is levied at a rate of 57.95p per liter for petrol and diesel, with VAT added on top at a rate of 20% of the combined product price and duty.

It has been frozen at that level since March 2011.

The average cost of a liter of petrol at UK forecourts on Tuesday was 167.3p, while diesel was 179.7p, figures from data firm Experian Catalist show.

This is an increase of 18p per liter for petrol and 27p for diesel over the past month.

This is due to a number of reasons. Most recently, oil prices surged immediately after Russia’s invasion of Ukraine due to supply fears, leading to a rise in wholesale costs.

However, prices were already increasing as global economies recover from the pandemic.

Will a fuel duty cut be announced by Rishi Sunak in the Spring Statement?

Mr Sunak is expected to outline further plans to support households facing financial hardship, with the FT, The Times, The Telegraph and The Guardian all reporting that these are predicted to include a cut to fuel duty.

The Chancellor will speak at 12.30pm on Wednesday, outlining various other policies aside from cutting fuel duty.

It is also anticipated he will tell MPs in the Commons that having a strong economy is vital in tackling Moscow’s aggression.

The Treasury has said the measures announced so far add up to around £21 billion of support this year, taking in the rebate, changes to Universal Credit and the freezing of fuel and alcohol duties.

How much could you save with a fuel duty cut?

If fuel duty was cut by 5p per litre, the RAC calculated this would reduce the cost of filling a typical 55-litre family petrol car by around £3.

Additional reporting by PA reporters.


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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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