Could Fuel Duty Rise? What it Means for Commercial Delivery Operators

Since March 2022, when the cost of diesel at the pump was £1.63/litre, the UK’s main fuel duty rate, set at 52.95 pence per litre, has remained frozen. The freeze has extended multiple times from what was originally a temporary 5p cut. 

The policy, introduced by the Government, is now set to remain in place until March 2026. But with the Autumn Budget approaching, questions are mounting around whether this freeze will continue, especially with the cost of fuel hovering around £1.35/litre, almost the lowest it has been since August 2021. (See RAC – pump prices over time) 

Chancellor Rachel Reeves maintained the fuel duty freeze, citing support for working people amid ongoing cost-of-living concerns. However, facing a significant public finance shortfall, fuel duty is among one of the few levers left that could be used to balance the books. 

While no official decision has been announced, speculation points to the possibility of an increase, potentially up to 10p per litre, effectively reversing the 5p cut and adding a further 5p. Such a rise, if enacted, would have implications for the logistics sector, particularly for commercial fleets operating vans and lorries that underpin the UK's supply chains and home delivery infrastructure. 

What a Fuel Duty Rise Could Mean for Fleet Operators 

Fuel constitutes a significant proportion of operating costs for logistics businesses, especially those running heavy goods vehicles (HGVs) and van fleets over long distances or dense urban routes. An increase in fuel duty, even a modest one, will:

• Increase operational costs.
• Reduce margins, particularly in price-sensitive sectors.
• Pressure businesses to pass on the additional costs to customers, risking their competitiveness.

Given that fuel duty revenues are declining as the electric vehicle (EV) transition gathers pace, diesel-dependent fleets, which are still the mainstay of logistics fleets, will bear the brunt of any future rises.

Discover potential Fuel Savings with our fleet savings calculator

The Efficiency Imperative 

With potential tax hikes looming and customer expectations for rapid, flexible, and sustainable deliveries rising, delivery companies must accelerate their drive for efficiency.

This is where intelligent route optimisation software becomes indispensable. By enabling better scheduling, smarter routing, and last-mile delivery management, such platforms can help:

• Reduce miles driven by consolidating deliveries and dynamically adjusting routes as orders are received.
• Cut fuel usage and emissions, helping offset rising duty costs while aligning with sustainability goals with optimised routes.
• Boost delivery density, by ensuring that stops are as close together as possible with clever scheduling, without affecting customer service levels.
• Improve first-time delivery success, reducing costly redeliveries and customer dissatisfaction by using customer engagement tools and delivery notifications.

At a time when every litre of fuel counts and margins are under intense pressure, logistics providers need tools that do more than just navigate roads, they must navigate economic headwinds, policy shifts, and demanding consumer expectations. 

If your company is facing challenges with fuel costs, route density, or delivery performance? Talk to us today to see how smarter planning can deliver real savings. 

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