UK Chancellor Reeves Cancels Planned Fuel Duty Rise

Chancellor Rachel Reeves announced that the 5-pence per litre increase in fuel duty scheduled for September will not be implemented. The decision, to be delivered to the House of Commons on Thursday, preserves the current duty level and forms part of a broader cost-of-living package aimed at motorists.

Birmingham Mail

The 5-pence cut, introduced in 2022 after Russia’s invasion of Ukraine, has been extended; its September expiry would have added 5 p per litre. The Iran war since February has lifted oil prices around 60 % and the Strait of Hormuz closure—affecting roughly one-fifth of oil—has spurred inflation. Fuel duty yielded £24 billion last year; extending the cut costs £2.4 billion, while a Treasury watchdog warns of a £3.6 billion shortfall if not raised. £50 million has been earmarked for heating-oil subsidies for rural households, particularly in Northern Ireland, and Ofgem expects the cap to rise from £1,641 to £1,843 for 33 million customers.

Mirror - UK

Labour’s local-election defeats have left the party vulnerable, with cost-of-living concerns dominating voter priorities. Greater Manchester mayor Andy Burnham has pledged to challenge Prime Minister Keir Starmer, making affordability central to his campaign. Leadership contest speculation has intensified. Reeves faces pressure from consumer groups and opposition parties; Howard Cox argues lower fuel prices boost tax revenue, while Richard Walker urges an extension or enlargement of the cut.

Birmingham Mail

The Prime Minister’s spokesperson said the government is “determined to keep costs down for motorists paying more because of the war in Iran” and that extending the cut is part of that effort. He added that a rapid de-escalation in the Middle East is the best way to keep pump prices low. The Treasury declined comment; a finance-ministry official told Reuters, “We do not comment on speculation.”

Mirror - UK

Some outlets describe the decision as “retaining the cut,” others as “scrapping the rise,” but both indicate duty will stay unchanged. Details of the energy-bill relief package and its rollout timing remain unclear.

The Guardian

• “However, he said: “The government is determined to keep costs down for motorists paying more because of the war in Iran.” — Prime Minister’s spokesperson

The Guardian

• “We do not comment on speculation.” — Spokesperson, UK Finance Ministry

Reuters

• “The 5p fuel duty cut that you allude to is an interesting one. That’s going to expire in September. I think, given where we are, we do need to be thinking and talking about extending it or enlarging it.” — Richard Walker, Executive Chair, Iceland

The Guardian

• “Howard Cox, Founder of campaign group FairFuelUK, said: "Time and again, over 16 years of campaigning, we have shown that lower fill-up costs deliver more tax to the Treasury by boosting other tax revenue streams.” — Howard Cox, Founder, FairFuelUK

Birmingham Mail

Ofgem will publish its July-1 price-cap decision on May 27, and Reeves is expected to unveil a broader energy-bill relief package later in the year, depending on fuel-price trends amid the Middle-East conflict.

The Guardian