Budget 2026 - impact on drivers: comment

The Chancellor announced that fuel duty remains frozen and the 5p cut has been extended until July 2027, and changes made to the mileage rates.

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By Jess Ralston

info@eciu.net

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Commenting on the Chancellor's announcement that fuel duty remains frozen and the 5p cut has been extended until July 2027, and changes made to the mileage rates, [1]  Izzy Romilly, Head of Transport at the Energy and Climate Intelligence Unit (ECIU) said:

"Today’s announcement that fuel duty remains frozen may provide some limited relief to those across the country who have no choice but to pay surging petrol and diesel costs. But we mustn’t lose sight of the fact that savings from the fuel duty freeze are in the realm of £40 per year for a typical car driver, while typical annual savings from switching to an electric car amount to many hundreds of pounds.

"The backdrop to this is a Government considering watering down EV targets, a move that would lock in higher driving costs for families by limiting the choice of cost-saving cars on offer at a time when interest in EVs on the new and second-hand market is rising. Mileage changes correctly recognise that many drivers, including care workers, social workers, electricians and plumbers, are being hit by spiralling fuel costs – but these changes do little to meet Ministers’ stated goal of getting us all off the oil and gas rollercoaster for good.
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Notes to editors:
 

  1. Budget 2026 document, https://www.gov.uk/government/publications/budget-2026-document


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