Fuel prices could go up in October

Drivers have long been overcharged at the petrol pumps – and we could be paying even more if fuel duty rises next month.

Earlier this year, the Competition and Markets Authority (CMA) said drivers have been overcharged because retailers aren’t passing on the savings when wholesale prices fall.

The Daily Mail says we’re already paying more tax on petrol and diesel than anywhere else in Europe.

And now a hike in fuel duty could be one of the measures announced in the autumn budget. This would be the first increase in over 10 years.

What is fuel duty and how much is it?

Fuel duty is a tax that’s included in the price we pay for petrol and diesel. It’s been frozen at 57.95p a litre since March 2011. When oil prices soared in 2022 after the start of the Russia-Ukraine conflict,  there was also an additional 5p duty cut.

The cut was extended by Jeremy Hunt in March this year, keeping prices below the frozen rate.

According to the RAC, the 5p discount is costing the Treasury £2bn a year.

How much could fuel duty go up by?

It’s expected that Chancellor Rachel Reeves will increase fuel duty next month as part of her plans to plug a £22bn gap in public spending. The prime minister has already warned this year’s budget will be “painful”.

We don’t know how much fuel duty might go up by yet, but the FairFuelUK campaign group reckons the chancellor will increase fuel duty by 10p a litre, bringing it to 62.95p.

Less well-off drivers hardest hit

Driving is expensive and lower-income drivers will be hardest hit if fuel duty rises, as they spend a bigger percentage of their income on petrol/diesel.

A study by the University of East Anglia found less well-off drivers spend as much as 20-30% more of their disposable income on fuel, compared to their wealthier counterparts.

Currently, it costs about £80 to fill an average family car (with a 55-litre fuel tank) with petrol, or £83 with diesel. A 5p increase would add an extra £2.75 each time you fill up, rising to £5.50 if 10p is added to the levy.

Save money on fuel

We have a few tips and tricks that may help you save money on fuel:

• Find the cheapest fuel using a price comparison site such as PetrolPrices, carwow.co.uk or Confused.com. The RAC also has a real-time fuel tracker showing price drops.
• You could also try filling up at a different time or on a different day – weekends are usually more expensive as demand is higher.
• Sign up for a loyalty scheme. Lots of fuel retailers have initiatives to help you save money on petrol and diesel. Shell Go+, Texaco Star, BPME, Tesco Fuel Clubcard and Esso Nectar are popular examples.