Drivers Fury as Labour Pushes Through First Fuel Duty Hike in 16 Years

Drivers were left stunned yesterday after Rachel Reeves became the first Chancellor in 16 years to raise fuel duty, pushing through a 5p increase at a time when households and small firms are already battling rising costs.

The duty, currently 52.95p per litre, will rise in stages between September 2026 and March 2027, then increase annually with inflation. The Treasury admitted that revenues have been dwindling as more motorists switch to electric vehicles.

Once worth £25 billion a year, around 2 per cent of the UK’s total tax take, the duty is forecast by the Office for Budget Responsibility to fall by £12 billion over the next decade. For years chancellors refused to increase the rate for fear of voter anger, but Ms Reeves has pushed forward.

Drivers face a 1p rise in September, a 2p jump in December and another 2p in March 2027. This will effectively cancel the 5p cut introduced after Russia’s invasion of Ukraine sent oil prices soaring. With VAT added, the increase will feel closer to 6p per litre for drivers.

Richard Smith of the Road Haulage Association warned the move would “be a hammer blow for many businesses”, adding, “Future increases now loom large for families struggling with the cost of living and for the many small businesses who keep our supply chains moving.”

Petrol currently averages £1.36 per litre, with 55 per cent of that swallowed by tax. Government data shows the UK remains mid-table among major EU economies for fuel taxation, although drivers insist any rise is intolerable.

Steve Walker of Auto Express said motorists were already on edge. “For millions, the car isn’t a luxury, it’s a lifeline. This rise won’t just nudge up weekly fuel bills, it’ll change behaviour,” he said. “Our data showed 67pc of motorists were already worried about fuel duty increasing, and now that concern doesn’t have long before it becomes reality.”

Drivers Vent Anger at the Forecourt

Across the country drivers blasted the decision as out of touch with reality. One commuter in Birmingham said: “They keep talking about squeezing the rich, but it’s always ordinary drivers who get clobbered first. I rely on my car for work, and this just feels like another kick in the teeth.”

A delivery driver based in Redditch told us: “Fuel’s already one of my biggest expenses. A few pence a litre might not sound much to people in Westminster, but it adds up to hundreds over a year for those of us on the road all day.”

Meanwhile a mother doing the school run in Kent added: “Public transport isn’t reliable where we live. They say they want fewer cars on the road, but they’re not offering realistic alternatives. It feels like we’re being punished just for getting on with daily life.”

Some drivers accused the Treasury of ignoring rural communities altogether, saying the policy favours cities with better public transport links.

Green Groups Cheer Long Overdue Move

However, environmental groups said the increase was long overdue. A Transform Scotland spokesperson said: “The changes to fuel duty are welcome to see after a 15 year freeze which, accompanied by above inflation increases in public transport fares, has undermined efforts to get people out of their cars.”

Ms Reeves delayed the start of the increase until September, offering a short reprieve after earlier plans for an April rise. But her decision not to immediately scrap the 5p cut or reinstate inflation uprating from 2026 will leave the Treasury £2.4 billion short.

Simon Williams of the RAC said motorists would feel only momentary relief. “Drivers will be relieved the Chancellor has decided to keep the 5p duty cut in place for now as it saves them more than £3 a tank. But this relief will be very short lived, given the staggered increase from next September.” He added that without the discount, drivers would still be paying more for petrol than before the Ukraine crisis sent prices soaring.

Electric Car Owners Face New Road Charge

Even with the fuel duty rise, the surge in electric vehicle take-up means Treasury coffers will continue to shrink. To tackle this, Ms Reeves announced a new road pricing scheme for electric vehicles and plug in hybrids from 2028.

Electric car drivers will be charged 3p per mile, calculated through their annual vehicle tax bill based on estimated mileage, adding around £255 a year for an average motorist covering 8,500 miles. Plug in hybrid drivers will pay 1.5p per mile.

Chris James from Worcestershire said: “We were planning on getting an electric car. We won’t now. What with the cost of charging it because electricity is going up and now having to pay per mile… we’ll stick with our old banger for a few more years. I’m sure they’ll be a lot of people like us doing the same. This Rachel Reeves is just killing the economy isn’t she? She just doesn’t seem to think things through.”