Fuel Duty Freeze Delays Pain for Drivers, But 5p Hike Looms in Early 2027

Drivers welcomed news earlier this month that the Government would extend the fuel duty freeze for the rest of the year, with campaigners hailing the move as a victory for motorists already struggling with high living costs.

Prime Minister Sir Keir Starmer confirmed that fuel duty would remain frozen throughout the remainder of 2026, easing fears of an immediate increase in petrol and diesel prices.

However, newly released HMRC figures suggest the relief may only be temporary.

According to the documents, drivers are now expected to face the full 5p per litre fuel duty rise in early 2027 instead of gradual increases spread across several months.

Under the revised timetable, fuel duty is set to rise by 3p per litre on January 1, 2027, taking the rate from 52.95p to 55.95p per litre. A further 2p increase is then expected on March 1, returning duty to the level it stood at before the temporary 5p cut introduced in 2022.

The Government had previously planned to phase the increase in over time. The original schedule would have seen fuel duty rise by 1p per litre on September 1 this year, followed by another 2p on December 1 and a final 2p increase in March 2027.

Instead, the latest plans indicate motorists could now face a steeper rise at the start of next year.

The temporary 5p cut to fuel duty was first introduced in 2022 in response to soaring petrol and diesel prices following Russia’s invasion of Ukraine. Since then, successive governments have repeatedly extended the reduction amid ongoing concerns over household finances and inflation.

While the extended freeze means drivers avoid higher costs at the pumps for now, the prospect of a sharp increase in early 2027 is likely to raise concerns among motorists and businesses alike, particularly if wholesale fuel prices remain elevated.

For drivers filling a typical 55-litre family car, a 5p per litre rise would add around £2.75 to the cost of a tank of fuel. Frequent drivers and businesses operating larger fleets could see significantly higher annual fuel bills if the increases go ahead as expected.