Drivers ‘to save £50 this year’ as fuel duty cut extended

UK Government say drivers are set to save around £50 this year and £250 since the 5p cut was introduced – a £13 billion tax cut for motorists.

They say, “Millions of drivers across the UK will continue to be supported at the pumps from Saturday as the extension to the temporary 5p fuel duty cut for petrol and diesel comes into effect – putting yet more money in people’s pockets”.

The Chancellor Jeremy Hunt announced the 12-month extension at the Spring Budget, as well as cancelling the planned inflation increase for 2024/25, saving car drivers around £50 this year and £250 since the 5p cut was introduced – a £13 billion tax cut for motorists overall over three years.

The temporary cut was first introduced in March 2022 to combat high fuel prices after global supply chain issues following the pandemic, as well as Russia’s invasion of Ukraine. Today’s extension takes effect as the government continues to support motorists with rising costs.

They added, “Taken with recent cuts to National Insurance Contributions – to the tune of around £1800 per household – this is putting even more money in people’s pockets. This is only possible because the government stuck to its plan to boost the economy. The economy has now turned a corner and 2024 is set to be the year that Britain bounces back”.

Chancellor for the Exchequer Jeremy Hunt said:

Cutting people’s tax bill, while protecting our public services, is a priority. We’re already saving drivers £50 a year and the average earner £900 a year – and if we stick to our plan, we will go even further, rewarding work and growing our economy.

Energy Security Secretary Claire Coutinho said:

We will always stand by UK drivers and today’s fuel duty cut is just one of the ways we are keeping costs down for families. Our plans for a new Pumpwatch will make sure motorists are getting a fair price at the pump.

To mark the extension coming into effect, the Financial Secretary to the Treasury Nigel Huddleston visited an Asda petrol station in Worcestershire on Saturday where he met staff and saw the supermarket chain’s more fuel-efficient fleet of vans.

Financial Secretary to the Treasury Nigel Huddleston said:

The last few years have been tough but we’re making real progress – which is why we are able to continue to support motorists for another 12 months.

By cutting taxes for working families and sticking to the plan, we can keep building a stronger economy and a brighter future where hard work is rewarded.

RAC head of policy Simon Williams said:

The Government’s decision to extend the 5p duty cut is certainly a help to cash-strapped drivers, particularly as this week wholesale fuel prices have risen on the back of a higher oil price.

With the creation of Pumpwatch and a price monitoring body on the horizon, there should soon be more pressure than ever on retailers to price fuel fairly, which will ensure it is only drivers who benefit from the duty cut.

UK Government said, “The existing duty rates on road fuel gases, which are lower than the equivalent rates on diesel, will also continue to 2032, giving the haulage industry greater certainty over future tax rates and supports the decarbonisation of the UK transport sector”.

Proposals for a new Pumpwatch scheme announced earlier this year will see the UK’s 41.2 million drivers get the latest petrol station prices at the click of a button, transforming how the UK shops for its fuel. Under the plans, all fuel stations would be legally required to share live information on their pump prices within 30 minutes of any change in price subject to the outcome of the government’s consultation.

This freely available data will enable tech companies to develop new ways for drivers to search for the cheapest fuel while on-the-go and access to this price comparison technology could see drivers save 3p per litre on fuel, while also helping to drive down prices by reigniting competition.