The January fuel duty rise is cancelled and the 5p cut runs to 30 June 2027. Then duty jumps 7.64p a litre in one go. What a tank costs now, what you save until July, and what the rise costs a year by car.
Quick Answer
Budget 2026 cancels the fuel duty rises planned for January and March 2027 and keeps the 5p cut until 30 June 2027, so duty stays at 52.95p a litre. On 1 July 2027 the cut ends and the delayed inflation rise lands at the same time: HMRC's rate table shows 60.59p a litre, 7.64p more. With VAT that is about 9.2p a litre at the pump, £5.04 on a 55-litre tank and about £93 a year for a 10,000-mile driver at 45mpg (our calculation).
Petrol and diesel main rate, pence per litre. Published 28 October 2026.
| Period | Before the Budget | After Budget 2026 |
|---|---|---|
| Before 23 March 2022 | 57.95p | |
| 23 March 2022 to 31 December 2026 | 52.95p (the 5p cut) | |
| 1 January to 28 February 2027 | 55.95p (+3p) | 52.95p |
| 1 March to 31 March 2027 | 57.95p (+2p) | 52.95p |
| 1 April to 30 June 2027 | 57.95p plus RPI inflation from 1 April | 52.95p |
| From 1 July 2027 | 57.95p plus RPI | 60.59p |
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Key points
What will your own car pay?
Enter your reg in the free fuel cost calculator. It reads the engine and fuel type from DVLA and works out your fuel cost per mile, month and year at today's pump prices; add 0.9p a mile for a 45mpg car from July 2027.
| Petrol | Diesel | |
|---|---|---|
| Pump price per litre | 174.57p | 199.33p |
| Fuel duty | 52.95p | 52.95p |
| VAT | 29.10p | 33.22p |
| Tax as a share of the price | 47.0% | 43.2% |
| 55-litre tank | £96.01 | £109.63 |
| Of which duty and VAT | £45.12 | £47.39 |
| Same tank at 60.59p duty (July 2027), other costs unchanged | £101.06 | £114.67 |
The Budget document says a household filling a typical 55-litre family car now spends around £24 more for petrol and £32 more for diesel than before the conflict in the Middle East began, and that diesel went above £2 a litre in October 2026. Pump prices will move with oil prices and the pound between now and July 2027, so the tank prices above are a like-for-like illustration of the duty change, not a forecast.
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Under the old plan a 55-litre tank would have cost £1.98 more from 1 January 2027 (3p plus VAT) and £3.30 more from 1 March (5p plus VAT). For a driver doing 10,000 miles a year at 45mpg, about 84 litres a month, the cancelled rises are worth about £26 between January and June 2027 (our calculation: two months at 3.6p a litre and four months at 6p). At the UK average 7,400 miles it is about £19. Both figures leave out the RPI rise that had been planned for April 2027 and is now deferred to July, so the real saving against the old plan is a little larger.
Our calculation of the extra duty and VAT for a full year at 60.59p against 52.95p, if retailers pass the rise on in full:
| Fuel economy | 7,400 miles | 10,000 miles | 12,000 miles |
|---|---|---|---|
| 35mpg (large petrol car, SUV) | £88.12 | £119.08 | £142.90 |
| 45mpg (typical petrol hatchback) | £68.54 | £92.62 | £111.14 |
| 55mpg (small diesel or hybrid) | £56.08 | £75.78 | £90.94 |
In pence per mile, a 45mpg car pays 5.35p in duty now (6.42p with VAT on it) and 6.12p from July 2027 (7.35p with VAT). Electric cars do not pay fuel duty; from April 2028 they pay eVED at 3p a mile instead (see our Budget 2026 guide for electric car drivers).
To see what your own car uses, enter its reg in the free fuel cost calculator. It reads the engine and fuel type from DVLA and works out the cost per mile, month and year at current pump prices.
The extra 3.7p cut on red diesel, used by farms, construction and rail freight, is extended to 1 July 2027 (paragraph 6.212). HMRC's tables show red diesel at 6.48p a litre until 30 June 2027 and 11.65p from 1 July 2027. Most HGVs keep the £1 annual vehicle tax (VED) rate on licences taken out between 1 July 2026 and 30 June 2027 (paragraph 6.200). The government puts the saving from its fuel duty decisions this Parliament at £472 for the average van driver and nearly £4,000 for the average HGV driver.
Every other motoring change in the Budget, including car tax from April 2027, is in our Budget 2026 guide for drivers.
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52.95p a litre on petrol and diesel, the rate since the 5p cut of 23 March 2022. VAT at 20% is then charged on the duty as well as the fuel, so duty and VAT together were about 82p of a 174.57p litre of petrol in the week of 19 October 2026.
Yes. Budget 2026 keeps the 5p cut, so the main rate stays at 52.95p a litre until 30 June 2027; the government calls this extending the cut and freeze. The RPI inflation rise that was planned for April 2027 is put back to 1 July 2027, when duty goes to 60.59p a litre.
No. Budget 2026 cancelled the 3p rise that was due on 1 January 2027 and the 2p rise due on 1 March 2027. Duty stays at 52.95p a litre until 30 June 2027.
60.59p a litre from 1 July 2027, according to HMRC's Budget 2026 rate tables. That is the pre-2022 rate of 57.95p plus RPI inflation, and 7.64p a litre more than now. With VAT it adds about 9.17p a litre at the pump, £5.04 on a 55-litre tank.
Our calculation, if retailers pass it on in full: about £69 a year at 7,400 miles and 45mpg, £93 at 10,000 miles and £111 at 12,000 miles. A 35mpg car doing 10,000 miles pays about £119 more, a 55mpg car £76.
No. VAT on petrol and diesel stays at 20%. It is charged on the fuel and on the duty, so each 1p of duty adds 1.2p at the pump.
It extended the extra 3.7p cut on red diesel to 1 July 2027. HMRC's tables show red diesel at 6.48p a litre until 30 June 2027 and 11.65p from 1 July 2027, when it returns to its pre-March 2022 rate plus RPI.
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