London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

Fuel duty cut by 5p a litre to help motorists to suffer less from the super high taxes that makes gasoline so expensive

Fuel duty cut by 5p a litre to help motorists to suffer less from the super high taxes that makes gasoline so expensive

The cut aims to deal with soaring costs, but the RAC says prices will remain at a high level.

The chancellor has announced a 5p a litre cut to fuel duty as motorists struggle with record fuel prices.

Rishi Sunak said the move, which kicked in at 18:00 GMT on Wednesday and will last until next March, was "the biggest cut to all fuel duty rates ever".

However, motoring company the RAC said the 5p cut only took prices "back to where they were just over a week ago".

It said the reduction would take £3.30 off the cost of filling a typical 55-litre family car.

Motorists have been hit by record pump prices since Russia's invasion of Ukraine led to an increase in the cost of oil because of supply fears.

Average pump prices hit new records on Tuesday, with petrol topping £1.67 a litre and diesel close to hitting £1.80 for the first time, the RAC said.

That left the cost of filling an average family car with petrol at more than £92 and nearly £99 for diesel.

Fuel duty - a government tax which makes up part of the price when you buy petrol or diesel - is currently 58p per litre and has been for 11 years.

The Treasury said the fuel duty cut - the first is more than a decade - would cost it £2.4bn and means a one-car family will save £100 on average over the next 12 months.

The average van driver will save £200, it said, while hauliers will save £1,500.

But RAC head of policy Nicholas Lyes said the cut was "a drop in the ocean" given the recent huge rise in fuel costs, which have not fallen despite crude oil coming off its record highs of earlier in March.

He also warned there was a "very real risk retailers could just absorb some or all of the duty cut themselves by not lowering their prices".

"If this proves to be the case it will be dire for drivers," Mr Lyes said. "It also wouldn't be totally unexpected based on the biggest retailers not reducing their prices late last year when the oil price fell sharply."

The RAC added although fuel duty had been cut to 53 per litre, it could take time to be reflected in pump prices due to it being charged on wholesale purchases by retailers, who are yet to buy new fuel at the lower rate.

In response to Rishi Sunak's Spring Statement, supermarket chains Asda and Sainsburys said they would reduce pump prices by 6p a litre, including a 1p reduction in VAT.

The average price of a litre of petrol has risen by more than 40p since last year's Spring Statement, which means the government is getting an extra 7p per litre in VAT, which is the other tax the government imposes on fuel.

Diesel prices are up by nearly 50p a litre, almost 9p of which is VAT.


The Treasury said it had acted now because: "Unique circumstances globally, including the war in Ukraine, have pushed pump prices up to unprecedented levels."

AA president Edmund King said he was concerned that the benefit would be lost unless retailers passed it on. "Since the start of the year, the 20p-a-litre surge in pump prices has been the shock that rocked the finances of families."

He said there had been a substantial reduction in wholesale fuel costs since 9 March.

"That needs to drive lower pump prices also," he added. "The road fuel trade shouldn't leave the Treasury to do the heavy lifting when cutting motoring costs."

Fuel prices, which were already rising as global economies recovered from the coronavirus pandemic, surged after the war in Ukraine pushed up global oil prices.

Changes in prices at the pump are mainly determined by crude oil prices and the dollar exchange rate, because crude oil is traded in dollars.

Russia is one of the world's major oil exporters and it is being targeted by economic and trading sanctions.

After Brent crude oil - a global benchmark for prices - hit a near 14-year high of $139 a barrel during the early stages of the conflict, prices fell back to around $100, but have since risen again and were trading at about $120 a barrel on Wednesday.

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×