Motorists across the UK are set to face significantly higher costs at the pump after the Chancellor confirmed the end of the long-standing fuel duty freeze in the Budget 2025.
The End of the Freeze and New Tax Timeline
For the first time in over 15 years, the tax on petrol and diesel will increase. The freeze, which has been in place since 2011, will be lifted in a series of stages. The final tax rate will reach 57.95p per litre by March 1, 2027.
The increases will be implemented in three phases. The first rise of 1p per litre will take effect in September 2026. This will be followed by two further increases of 2p per litre each on December 1, 2026, and finally on March 1, 2027.
Financial and Political Fallout
The decision to maintain the duty freeze has come at a colossal cost to the Treasury. According to the Office for Budget Responsibility (OBR), the total cost since the policy began in 2011 has ballooned to an estimated £120 billion. Even just extending the freeze until September 2026 will cost the government £2.4 billion next year.
The announcement has sparked immediate political controversy. Shadow Chancellor Sir Mel Stride condemned the move, accusing Chancellor Rachel Reeves of “reaching into the pockets of commuters and hardworking families” to fund increased government spending.
New Charges for Electric Vehicles
In a parallel move that signals a new era for motoring taxation, the Budget also introduced mileage-based charges for cleaner vehicles. Starting in 2028, fully electric vehicles (EVs) will be charged 3p per mile. Plug-in hybrid vehicles will face a lower charge of 1.5p per mile.
This marks a fundamental shift as the government seeks to replace lost fuel duty revenue from the growing number of EVs on Britain's roads, ensuring all motorists contribute to road upkeep.
