Politics · United Kingdom · 3 hrs ago
Think tank urges Chancellor to raise UK fuel duty gradually
The Resolution Foundation has urged Chancellor John Healey to raise UK fuel duty rather than extend its freeze.
Fuel duty is a tax on petrol and diesel, and a cut introduced in 2022 has been extended repeatedly.
Under current plans, the tax is due to rise by 3p a litre in January, another 2p in March and 1p in April as the cut and freeze end.
The think tank says the increases should be smaller and spread over time, suggesting duty rise from 53p a litre now to 58p in 2028 and 66p in five years.
Fuel prices are already high, with diesel topping £2 a litre and petrol costing £1.75 at many forecourts, as conflict in the Middle East disrupts supply.
Critics say higher fuel taxes would strain working people and raise costs across the economy, including for food and deliveries.
Healey is widely expected to extend the cut and freeze in next week's Budget, but the think tank argues against doing so.
The Resolution Foundation has urged Chancellor John Healey to raise Fuel Duty gradually rather than extend its freeze.
The think tank proposes small quarterly increases, taking the levy from 53p a litre to 58p in 2028 and 66p in five years.
Fuel Duty is currently scheduled to rise by 3p a litre on January 1, with a further 2p rise in March and 1p in April.
The foundation says the freeze mainly benefits higher-income households and has reduced tax revenue and weakened incentives to use fossil fuels.
Shadow Transport Secretary Richard Holden and FairFuelUK founder Howard Cox criticised the proposal, saying higher fuel taxes would burden working people and raise costs across the economy.
- Who
- The Resolution Foundation urged Chancellor John Healey to raise Fuel Duty. Richard Holden and Howard Cox criticised the proposal.
- What
- The think tank proposed small, quarterly increases instead of extending the Fuel Duty freeze.
- When
- The article was published on October 18, 2026. The proposed changes would begin on January 1.
- Where
- The United Kingdom.
- Why
- The foundation says the freeze is poorly targeted, benefits higher-income households and reduces revenues and incentives to move away from fossil fuels.
Resolution Foundation
Richard Holden and Howard Cox
Who bears the cost
Resolution Foundation
The foundation says higher-income households tend to spend more of their income on petrol and diesel than lower-income households.
Richard Holden and Howard Cox
Holden says the proposal is out of touch with working people who rely on vehicles; Cox says fuel taxes affect costs across the economy.
Whether the freeze is well-targeted
Resolution Foundation
The foundation says extending the freeze is not a well-targeted measure.
Richard Holden and Howard Cox
Cox says that claim ignores the role of road transport in bringing products to supermarket shelves.
Fuel Duty is scheduled to rise by 3p a litre.
A further 2p rise is scheduled as a cut introduced in 2022 is due to expire.
The 16-year freeze is scheduled to end, adding a further 1p a litre.
The foundation proposes that Fuel Duty reach 58p a litre.
The foundation proposes that Fuel Duty reach 66p a litre.
- Current Fuel Duty
- 53p a litre
- Proposed increase
- Small quarterly rises
- Proposed rate in 2028
- 58p a litre
- Proposed rate in five years
- 66p a litre
- Diesel price
- More than £2 a litre for the first time that month
- Petrol price
- £1.75 in many forecourts
What people are saying
Ceding to demands to extend, yet again, the long freeze on Fuel Duty into next year is not the place to pour scarce resources.
The claim that this is somehow fairness is out of touch with the reality for working people up and down our country who rely on their vehicles for work, to get the kids to school or visit loved ones.
Higher fuel taxes do not just hit drivers, they push up the cost of food, deliveries, manufacturing, farming and services across the economy.