Government measures to ease rising fuel costs for motorists and businesses
The government has announced a package of measures to help motorists and businesses manage rising fuel costs. These costs have increased following disruption linked to the conflict in Iran. As a result, the government measures to ease rising fuel costs aim to provide meaningful relief across several sectors.
Extension of the fuel duty cut
As part of the package, the temporary 5p fuel duty cut has been extended until the end of 2026. Consequently, fuel duty on petrol and diesel remains at its lowest level for more than 16 years. The government estimates that this extension will save the average driver around £120 since 2025. Therefore, everyday motorists should feel a direct benefit at the pump.
In addition, the extension provides welcome certainty for businesses that rely heavily on road transport. By maintaining the reduced rate, the government measures to ease rising fuel costs offer stability during a period of uncertainty.
Support for the haulage sector
Beyond the fuel duty cut, additional support has also been announced for the haulage sector. Specifically, hauliers will benefit from a 12-month road tax holiday. Qualifying vehicles will pay just £1 on renewal during this period. According to the government, this could save up to £600 for a typical heavy goods lorry. Moreover, the largest vehicles on our roads could save as much as £912.
This targeted relief recognises the essential role that hauliers play in the UK economy. Furthermore, these government measures to ease rising fuel costs help to protect supply chains from additional pressure.
Reduced fuel duty on red diesel
The measures also include a significant reduction in the fuel duty charged on red diesel. In fact, the government has cut the rate by over one third until the end of the year. As a result, the rate is now at its lowest level for more than 20 years.
Farmers, rail freight operators and other qualifying users are expected to benefit from this reduced rate. Consequently, these sectors can manage their operating costs more effectively during a challenging period. This element of the government measures to ease rising fuel costs is particularly important for rural businesses and freight operators.
Marking the announcement, the Prime Minister Sir Keir Starmer said:
‘I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances. Because when global events drive up prices, it’s working people who feel it first.
That’s why this government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.’
What these changes mean for your business
Taken together, the government measures to ease rising fuel costs provide broad-based support for individuals and businesses alike. However, the impact on your business will depend on your specific circumstances and fuel usage. Therefore, it is important to review how these changes affect your operations and financial planning.
If you would like more information about government measures to ease rising fuel costs or would like to speak to one of our experts, please get in touch with our team today.
