Fuel duty rates: 2026 to 2027
Published 26 February 2026
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This publication is available at https://www.gov.uk/government/publications/fuel-duty-rates-for-2026-to-2027/fuel-duty-rates-2026-to-2027
Who is likely to be affected
Manufacturers, importers, distributors, retailers and household and business consumers of petrol, diesel and other fuel products that are subject to fuel duty.
General description of the measure
This measure extends the temporary 5 pence per litre (ppl) cut in the rates of fuel duty, first introduced at Spring Statement in March 2022, until the end of August 2026, avoiding a 5 ppl increase in March 2026 when the cut was due to expire.
The main fuel duty rates will be increased by:
- 1 ppl on 1 September 2026
- 2 ppl on 1 December 2026
- 2 ppl on 1 March 2027
This will gradually reverse the cut and return to the rates before March 2022.
Fuel duty rates for rebated and lower taxed fuels will also increase by the equivalent proportion of the temporary cut. The planned increase in line with inflation for 2026 to 2027 will not take place.
The current and future fuel duty rates are shown in the following table:
Light oils
| Type | *Rates prior to 23 March 2022 | *Continued cut rates (to 31 August 2026) | *Rates from 1 September 2026 | Rates from 1 December 2026 | Rates from 1 March 2027 |
|---|---|---|---|---|---|
| Unleaded petrol | 0.5795 | 0.5295 | 0.5395 | 0.5595 | 0.5795 |
| Light oil (other than unleaded petrol or aviation gasoline) | 0.6767 | 0.6267 | 0.6367 | 0.6567 | 0.6767 |
| Aviation gasoline (Avgas) | 0.3820 | 0.3629 | 0.3667 | 0.3743 | 0.3820 |
| Light oil delivered to an approved person for use as furnace fuel | 0.1070 | 0.0978 | 0.0996 | 0.1033 | 0.1070 |
Heavy oils
| Type | *Rates prior to 23 March 2022 | *Continued cut rates (to 31 August 2026) | *Rates from 1 September 2026 | Rates from 1 December 2026 | Rates from 1 March 2027 |
|---|---|---|---|---|---|
| Heavy oil (diesel) | 0.5795 | 0.5295 | 0.5395 | 0.5595 | 0.5795 |
| Marked gas oil | 0.1114 | 0.1018 | 0.1037 | 0.1076 | 0.1114 |
| Fuel oil | 0.1070 | 0.0978 | 0.0996 | 0.1033 | 0.1070 |
| Heavy oil other than fuel oil, gas oil or kerosene used as fuel | 0.1070 | 0.0978 | 0.0996 | 0.1033 | 0.1070 |
| Kerosene to be used as fuel for an excepted machine (other than for heating) | 0.1114 | 0.1018 | 0.1037 | 0.1076 | 0.1114 |
Biofuels
| Type | *Rates prior to 23 March 2022 | *Continued cut rates (to 31 August 2026) | *Rates from 1 September 2026 | Rates from 1 December 2026 | Rates from 1 March 2027 |
|---|---|---|---|---|---|
| Bioethanol | 0.5795 | 0.5295 | 0.5395 | 0.5595 | 0.5795 |
| Biodiesel | 0.5795 | 0.5295 | 0.5395 | 0.5595 | 0.5795 |
| Biodiesel for use in an excepted machine | 0.1114 | 0.1018 | 0.1037 | 0.1076 | 0.1114 |
| Gas oil bio blend for use in an excepted machine | 0.1114 | 0.1018 | 0.1037 | 0.1076 | 0.1114 |
Road fuel gases
| Type | *Rates prior to 23 March 2022 | *Continued cut rates (to 31 August 2026) | *Rates from 1 September 2026 | Rates from 1 December 2026 | Rates from 1 March 2027 |
|---|---|---|---|---|---|
| Road fuel natural gas including biogas | 0.2470 £ per kg |
0.2257 £ per kg |
0.2300 £ per kg |
0.2385 £ per kg |
0.2470 £ per kg |
| Liquefied petroleum gas (LPG) | 0.3161 £ per kg |
0.2888 £ per kg |
0.2943 £ per kg |
0.3052 £ per kg |
0.3161 £ per kg |
Other fuel
| Type | *Rates prior to 23 March 2022 | *Continued cut rates (to 31 August 2026) | *Rates from 1 September 2026 | Rates from 1 December 2026 | Rates from 1 March 2027 |
|---|---|---|---|---|---|
| Aqua-methanol | 0.0790 | 0.0722 | 0.0736 | 0.0763 | 0.0790 |
*pound per litre as set out in primary legislation and guidance, unless stated otherwise.
Policy objective
Alongside other measures announced at Budget 2025 to address the cost of living, this measure continues to support motorists by freezing the current fuel duty rates until the end of August 2026. Rates will gradually return to March 2022 levels by March 2027, avoiding a 5 ppl increase in March 2026 when the cut was due to expire.
The planned increase in line with inflation for 2026 to 2027 is also being cancelled. This measure will save the average car driver £49 in 2026 to 2027 compared to previous plans.
Background to the measure
Fuel duty is payable on petrol, diesel and other liquid fuels used in vehicles, machinery, and for heating. It is also payable on gases used as fuel for road vehicles, but otherwise excludes gas, electricity, and solid fuels, such as coal, which are subject instead to the climate change levy.
At Spring Statement 2022, the previous government announced that rates of fuel duty would be reduced for 12 months to support households and businesses at a time of high energy prices. This included cutting rates for heavy oil (diesel and kerosene), unleaded petrol, and light oil by 5 ppl, with a proportionate percentage cut (equivalent to 5 ppl from the main fuel duty rate of 57.95 ppl) to the rates for other fuels and rebated fuels, where practical. This was extended for a further 12 months at fiscal events in 2023, 2024 and 2025 and was due to expire on 22 March 2026. Pump prices have since reached their lowest levels since 2021.
At Budget 2025, the government announced that the 5 ppl cut would be extended until the end of August 2026, avoiding a 5 ppl increase in March 2026 when the cut was due to expire. Rates will gradually return to March 2022 levels by March 2027.
The government also confirmed that the planned increase in line with inflation for 2026 to 2027 would not take place, with RPI uprating resuming from 2027 to 2028 onwards.
Detailed proposal
Operative date
The change will have effect from 23 March 2026.
Current law
Fuel duty legislation is contained in the Hydrocarbon Oil Duties Act 1979 (HODA). The rates are set out in sections 6 to 8 and relevant rebates on those rates for certain fuels are set out in sections 11, 13AA, 13ZA, 14, 14A and 14B.
The temporary cut to rates is contained in the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2022 (Continuation) Order 2025.
Proposed revisions
Secondary legislation will be introduced to adjust the liability to duties in sections 6 to 8 and the rebates in sections 11, 13AA, 13ZA, 14,14A and 14B of HODA.
This will extend the 5 ppl cut until 31 August 2026. Fuel duty rates will then be increased on 1 September 2026, 1 December 2026 and 1 March 2027 to return them to fuel duty levels before March 2022.
Summary of impacts
Exchequer impact (£ million)
| 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 |
|---|---|---|---|---|---|
| -45 | -2,370 | -855 | -855 | -850 | -840 |
These figures are set out in Table 4.1 of Budget 2025 document and have been certified by the Office for Budget Responsibility (OBR). More details can be found in the policy costings document published alongside Budget 2025.
Macroeconomic impact
The measure will have a direct effect on Consumer Price Index (CPI). In their November 2025 Economic and Fiscal Outlook (EFO), the OBR have estimated a reduction in the CPI inflation rate in 2026 to 2027 as a result of this measure, with a smaller increase in 2027 to 2028.
Impact on individuals, households and families
This measure is expected to impact up to an estimated 36 million individuals. While the temporary 5 ppl cut to fuel duty will end at the end of August 2026, motorists and other fuel users will continue to benefit from a lower rate of fuel duty, compared to before March 2022, until the end of February 2027. This measure is not expected to have an impact on family formation, stability, or breakdown.
Customer experience for individuals, households and families is therefore expected to remain broadly the same, as changes to the rates of fuel duty do not affect any processes or tax administration obligations for them.
Equalities impacts
An individual may be affected by this measure regardless of their protected characteristics. If a protected group is overrepresented in this population, then it will be disproportionately impacted. HMRC does not currently hold data on the protected characteristics of individuals impacted by this measure and so cannot determine conclusively if there are any equality impacts.
Administrative impact on business including civil society organisations
The measure is expected to have a negligible administrative impact on businesses and civil society organisations distributing, supplying, and using fuel types subject to fuel duty. One-off costs could include familiarisation with the new fuel duty rates and updating systems to reflect the changes. There are not expected to be any continuing costs.
This measure will benefit businesses and civil society organisations where fuel is part of ongoing running costs. By more gradually reversing the temporary 5 ppl cut, which would otherwise end on 22 March 2026, these fuel users will continue to incur a lower amount of fuel duty, compared to before March 2022, until the end of February 2027.
This measure is not expected to disproportionately impact civil society organisations
HMRC customer experience is expected to remain broadly the same, since it does not change any processes or tax administration obligations.
Operational impact (£ million) (HMRC or other)
HMRC will not incur any costs implementing this decision.
Other impacts
This measure is being introduced to provide continued support to individuals, households and businesses, which will likely maintain any marginal impact of carbon emissions from increased consumption of fossil fuels that this measure may cause.
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax receipts and fuel duty returns, and will be assessed alongside other excise duty measures.
Further advice
If you have any questions about this change, contact Neil Mills at neil.mills@hmrc.gov.uk.
Declaration
Dan Tomlinson MP, Exchequer Secretary to the Treasury has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.