Autumn Budget 2021: Fuel duty frozen for 12th year

Chancellor of the Exchequer Rishi Sunak has kept fuel duty at 57.95p-per-litre for the twelfth year in a row, following record petrol prices.  

The Government planned to increase fuel duty by 2.8p but with the average petrol price reaching 142.94p-per-litre on Sunday (24 October) - the highest since 16 April 2012 when it hit 142.48p - the Chancellor said he was “not prepared to add to the squeeze on families and small businesses”. 

>>> Fuel prices expected to hit 150p-per-litre in 2022

The freeze will save drivers nearly £8 billion over the next five years, according to the Chancellor, and will mean the average tank of fuel will cost around £15 less per car and £30 less per van, compared to pre-2010 plans.

“After 12 consecutive years of frozen rates, the average car driver will now save a total of £1,900,” Sunak said.

RAC fuel spokesman Simon Williams welcomed the fuel duty freeze. 

“With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt,” he said. 

“If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.”

However, he added that the RAC was “disappointed” that the Chancellor “did not provide some respite for drivers at the pumps”.

“As VAT is charged on the final cost at the pumps, a temporary cut in VAT to motor fuels would have benefitted drivers immediately at time when filling up the car is hurting household budgets more than ever before as well as the wider economy as people will have less money to spend," he said.