Millions of UK drivers could face a significant increase in fuel costs as the new Labour Government considers ending an almost 15-year freeze on fuel duty in the upcoming October Budget.
Now experts are warning if the fuel duty rises, drivers could see potential cost hikes of £107 annually.
The temporary 5p cut in fuel duty was introduced in 2022 under the Conservative Government but was always intended to be a short-term measure.
Its potential removal now comes at a challenging time for motorists already grappling with high fuel prices, inflation, and other economic pressures.
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Rhydian Jones, car insurance expert at Confused.com said: “Since 2022, drivers have been paying a lower fuel duty than previous years, with a cut of 5p per litre.
“Although it might not seem a lot, this has helped drivers save about £130 a year. But there are discussions that this cut might be reversed, and fuel duty could increase by even more than 5p per litre.
“While this might put a strain on the pockets of many, drivers must remember there are many ways to improve your fuel economy. Doing things like checking tyre pressure and reducing the amount you accelerate or idle could make fuel in tanks last that bit longer.”
The potential tax rise also comes after Prime Minister Sir Keir Starmer warned that the Government would need to desperately fill the £22billion public finance black hole left over from the previous Conservative administration.
According to recent data by the Office for Budget Responsibility, fuel duties are expected to raise £24.7billion in 2023-24, representing 2.2 per cent of all receipts.
Fuel duties are taxes put on purchases of petrol and diesel. They represent a significant source of revenue for the Government to collect each year.
But as more drivers switch to electric cars, which currently do not pay fuel duty, it has left a huge funding hole.
In a move to close this gap, Chancellor of the Exchequer Rachel Reeves has hinted towards a new pay-per-mile tax scheme which would see all car owners pay the same prices.
Gordon Wallis, an expert from InterFuels, commented: “We need a balanced decision that takes into account the economic challenges faced by motorists while encouraging fuel efficiency and sustainability.
“And when it comes to topping up your tank, it can also be confusing to know which fuel stations are the cheapest around.”
As the Government prepares for the upcoming October Budget, we’re facing the very real possibility of a fuel duty rise that could end a 15-year freeze.”
To help drivers cope with rising costs, Wallis suggests practical strategies including maintaining a steady speed and sticking to speed limits.
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driving at a consistent speeds can help reserve fuel
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Research from the group found that driving at a consistent speed, like the 70mph limit on motorways, can increase fuel efficiency by up to 25 per cent compared to driving faster.
He also recommended revisiting good driving habits like avoiding rapid acceleration and harsh braking.
