New fuel duty rules have come into force this week, bringing updated costs for thousands of drivers under the Labour government. Chancellor Rachel Reeves implemented changes starting June 15 that will remain in effect through the end of the year.
Key Changes to Fuel Duty
The new regulations include a further reduction to the rebated rate for gas oil (red diesel), biodiesel, and bioblend by 3.7 pence per litre. The updated rates apply to several fuel types used in excepted machines:
- Marked gas oil: 6.48p per litre
- Kerosene used as fuel for an excepted machine (excluding heating): 6.48p per litre
- Biodiesel for use in an excepted machine: 6.48p per litre
- Gas oil bio blend for use in an excepted machine: 6.48p per litre
Fuel Duty Freeze Extended
At the last budget, Chancellor Reeves announced a nine-month freeze on fuel duty. However, she confirmed that the temporary 5p cut, first introduced by former Chancellor Rishi Sunak in 2022 following Russia's invasion of Ukraine, will end in September.
Prime Minister Keir Starmer earlier this year confirmed a fuel duty freeze would remain in place. He stated: "There is more that we can do, and I can announce today that we are giving our hauliers a 12-month vehicle tax holiday, helping to keep prices down, and we are backing drivers by extending the freeze in fuel duty for the rest of the year."
Starmer attributed the freeze to the government's economic policies, saying: "This is possible because of the decisions taken by the chancellor, making us the fastest-growing economy in the G7. She will set out further action tomorrow."
Referring to increased fuel prices caused by the US-Israeli attack on Iran, Starmer added: "This is not our war, but while the parties opposite wanted to jump into it, Labour will always protect working people."
In quotes released by the Treasury, Chancellor Reeves said: "The war in Iran is pushing up fuel prices here at home but after strong growth at the beginning of the year, I am stepping in to protect people at the pump. By protecting households and businesses we are building a stronger and more secure economy for Britain. That is the right economic plan."
