London Daily

Focus on the big picture.
Wednesday, Oct 15, 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
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
DJI Loses Appeal to Remove Pentagon’s ‘Chinese Military Company’ Label
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
Ex-Microsoft Engineer Confirms Famous Windows XP Key Was Leaked Corporate License, Not a Hack
China’s lesson for the US: it takes more than chips to win the AI race
Australia Faces Demographic Risk as Fertility Falls to Record Low
California County Reinstates Mask Mandate in Health Facilities as Respiratory Illness Risk Rises
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
French Political Turmoil Elevates Marine Le Pen as Rassemblement National Poised for Power
China Unveils Sweeping Rare Earth Export Controls to Shield ‘National Security’
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
×