Will fuel duty go up?

As the conflict in Iran forces oil prices upwards, motorists are worried what impact it will have on prices at the pumps.

So naturally, many are wondering what the government will and could do to keep costs down.

And at the moment, the discussion keeps coming back to a planned fuel duty increase.

What’s happening to fuel duty?

In last year’s Budget, chancellor Rachel Reeves confirmed fuel duty would be frozen at its current rate until September 2026.

But over the following few months, it will gradually return to March 2022 levels.

On 1 September, fuel duty will go up by 1p, followed by a 2p increase on 1 December and another 2p increase on 1 March 2027.

Will the government change course on fuel duty?

Since the Iran conflict began, chancellor Rachel Reeves has been facing calls to scrap the planned fuel duty hike.

And while No 10 says the chancellor is keeping “all taxes under review”, she’s so far refused to change course.

However, Reeves is keeping a close eye on the financial impact of the Middle East crisis on drivers.

“This week, I am meeting with petrol forecourt operators and I will not hesitate to call out providers who fail to provide data to the fuel finder,” she said.

“I have also asked the [Competition and Markets Authority] to be vigilant across prices including essentials like road fuel and heating oil.

“Let me absolutely be clear - I will not tolerate any company exploiting the current crisis to make excess profits at consumer’s expense.”

The chancellor added that “rapid de-escalation” is “the best way to keep prices at the pump low” and that she will “continue to monitor prices as the situation develops”.

How high will petrol prices go?

The RAC is predicting that unleaded is likely to reach 140p a litre in the next week or so, and that diesel could soon costs at least 160p a litre.

Head of policy Simon Williams has urged drivers to “continue filling up as normal”, but to “shop around for the best prices”.

The AA has, similarly, advised motorists not to “change their refuelling habits”.

However, AA president Edmund King said drivers could save money by “cutting out some non-essential journeys and changing their driving style to conserve fuel”.

What else can I do to save money behind the wheel?

As well as shopping around, making fewer non-essential journeys, and using more fuel efficiently, there are a few other ways to save money on the road.

Avoid motorway services 

If you’re planning a long drive, fill up before you get on the motorway, so you don’t have to pay premium prices for fuel at service stations.

Sign up for fuel loyalty cards

Some petrol stations and supermarkets have loyalty schemes, so if there are a few you use regularly, consider signing up. 

Shell Go+, BPme Rewards and Texaco Rewards allow you to collect points that can be exchanged for money on fuel. 

Supermarket loyalty schemes like Tesco’s Clubcard can also be used to buy fuel.

Use cashback 

Paying for fuel with cashback credit or debit card could also help offset higher prices.

But remember you have to repay the full balance each month to avoid paying interest, as this could cost you more than the saving in the long term.

Read our blog on 10 easy ways to cut the cost of driving for more money-saving tips.