Rachel Reeves has confirmed that the 'average' driver will receive a £120 boost under a major scheme aimed at mitigating the economic fallout from the Iran War. The Labour Party Chancellor announced that fuel duty will remain frozen until New Year's Day, extending the 5p cut introduced earlier.
Fuel Duty Freeze Extended
The Chancellor has promised lower costs for millions of drivers as the government holds pump prices down. The 5p fuel duty cut, initially introduced in 2025, will now continue until the end of the year. According to a government press release, this extension means the average driver will have saved £120 since the cut was first implemented, keeping fuel duty on petrol and diesel at its lowest rate in over 16 years.
RAC Welcomes Decision
Simon Williams, head of policy at the RAC, commented: 'Drivers are struggling with the cost of filling up, especially now petrol has reached an Iran War high of 158.73p a litre. The decision to keep the 5p fuel duty in place for the time being is very welcome. The Prime Minister's announcement that duty won't go up this year means a penny won't go back on in September, followed by a further 2p in December. The big question is now: what will happen next year? Will drivers be hit with the full 5p in one go in the spring, will a new phasing be agreed, or will the Government even abandon an increase altogether?'
Prime Minister's Statement
Labour Party leader Sir Keir Starmer said: 'I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances. Because when global events drive up prices, it's working people who feel it first. That's why this Government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.'
