Petrol drivers hit with new 69p per litre charges | Tech News
Petrol drivers will face 69p per litre charges as a consequence of a tax cut freeze which is being thawed out from 2026. Fuel obligation is a tax “included in the price you pay for petrol, diesel and other fuels used in vehicles or for heating”, the Government explains on its web site.
The tax is at present levied at a flat price of 52.95p per litre for petrol and diesel. After that, VAT at 20% is charged on the sum of the obligation and the pre-tax pump price. At the second, fuel obligation and the VAT it is subject to involves round 64p (63.5p) per litre (not together with VAT on the pump price, which is not fixed, and depends upon the ultimate sale price).
The 52.95p price has been frozen since 2011-12 and consists of a momentary 5p cut introduced in in 2022-23 that has since been prolonged on a quantity of events, most lately to September 2026 in Rachel Reeves‘ Autumn Budget final month.
After that time the federal government plans to drop the 5p cut in three levels.
On September 1st subsequent yr, it can cut back it by 1p, then by 2p on December 1 2026, earlier than returning to pre-March 2022 ranges by dropping the remaining 2p of the cut on March 1, 2027.
Under this method, as soon as the cut is totally phased out, the flat price might be 57.95p, with drivers charged round 69.54p per litre based mostly on the obligation after which 20% VAT charged on high of the obligation.
It means drivers will fork out an automated 69p per litre on the pumps in tax earlier than all the opposite prices are added on high, together with more VAT on the ultimate sale price.
According to the Office for Budget Responsibility (OBR) fuel duties “represent a significant source of revenue for the Government”.
“In 2025-26, we expect fuel duties to raise £24.4 billion. That would represent 2.0% of all receipts and is equivalent to £850 per household and 0.8% of national income,” it provides.
Lifting the fuel obligation freeze attracted criticism, with Shadow Chancellor Sir Mel Stride claiming: “Now after just one year Labour are putting up the duty and reaching into the pockets of commuters and hardworking families — all because they are too weak to control spending.”
Ms Reeves additionally unveiled a new pay-per-mile charge for electric automobiles and plug-in hybrids. It will see EVs charged 3p per mile, with plug-in hybrids charged at 1.5p. The EV levy might be rolled out from 2028.
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