Motorists are bracing themselves for steep petrol price increases from September 2026, with costs set to surge by an additional £3 for every full tank. The Treasury has confirmed it will abolish the fuel duty freeze and eliminate the current 5p per litre reduction.
Chancellor Rachel Reeves announced that pump prices will rise by 1p a litre from September 1, 2026, followed by a further 2p per litre on December 1, 2026, and an additional 2p per litre on March 1, 2027. This means drivers filling a 60-litre tank will face an extra £3 charge.
Subsequently, fuel duty rates will rise annually in accordance with inflation.
The move brings to an end a 16-year fuel duty freeze - which has deprived the Treasury of £120billion in revenue. It also rolls back the 5p reduction implemented in 2022.
Howard Cox, founder of FairFuel UK, said: "It's time the Labour party lose the anti-driver label, and at last see private road user transport as a stimulus to delivering economic growth, not the ill-informed belief trumpeted by Ed Miliband they are responsible for climate change."
Petrol car drivers are presently enjoying fuel prices at their most affordable since summer 2021, according to fresh figures. A litre of petrol at British forecourts averages 131.91p, the RAC reported.
Prices haven't been this low since July 2021, when they stood at 131.81p per litre. The RAC noted that average petrol prices have dropped by more than 5p since early December, reducing costs by nearly £3 each time motorists fill a standard 55-litre family vehicle.
Diesel prices have dropped by 3p per litre since the beginning of January to 140.97p. The RAC has attributed this decline to falling oil prices, which dipped below 60 US dollars per barrel on 7 January for the first time since February 2021.
Simon Williams, RAC head of policy, commented: "Had retailers passed on more of the savings they've benefited from when buying new fuel supply on the wholesale market, the January price reductions would probably have been bigger."
A December report from the Competition and Markets Authority, the UK's competition watchdog, revealed that profit margins for fuel retailers had increased over the previous year. The report concluded this rise could not be justified by operating cost pressures, as retailers and supermarkets had claimed, suggesting that competition within the sector was "weak".
UK fuel retailers must now report pump price changes to a Government scheme by law, making it simpler for motorists to locate more affordable petrol and diesel.
Third-party fuel-price applications and websites can now tap into data from the Fuel Finder database. As of Monday, every filling station must report price changes within 30 minutes.
Fresh Government guidance also provides instructions for motorists to flag up any discrepancies between forecourt prices and online figures. Establishing a Government-supported Fuel Finder platform was amongst the key proposals put forward by the Competition and Markets Authority in July 2023, following an extensive examination of the industry.
Energy Consumers Minister Martin McCluskey commented: "Real-time prices will drive up competition and is set to see working families save around £40 a year at the pump."
