Fuel duty to rise on 1st July 2027: Expert urges Brits to plan ahead
Practical Car & Van Rental chief executive Graham Lond says the Budget's extension of the 5p fuel duty cut to 1 July 2027 gives motorists breathing space but does not remove the risk, and urges tradespeople and van users to plan for a rise of at least 5p a litre next summer. The release sets out what the Treasury's costings say happens on that date, with Practical's tips for keeping fuel costs down on a hire. The press release is published below as supplied.
Tradespeople, house movers and holiday hirers are being urged to use the next eight months to plan, after the Budget confirmed that the 5p fuel duty cut will end on 1 July 2027.
In his Budget on 28 October, Chancellor John Healey extended the temporary 5p per litre cut, and the freeze on fuel duty rates, until 1 July 2027. HM Treasury's policy costings, published alongside the Budget, state that fuel duty will rise by 5p a litre on that date and will also be uprated in line with the Retail Prices Index (RPI). Annual RPI increases follow from April 2028.
Because VAT is charged on top of fuel duty, a 5p rise in duty adds roughly 6p a litre at the pump. That is before the RPI increase, which has not yet been set, so the full change in pump prices is not yet known.
Graham Lond, CEO at Practical Car and Van Rental, warns that the date falls at the start of the busiest months for van hire, house moves and summer road trips.
"The Chancellor has bought motorists some welcome breathing space, but sadly, he hasn't removed the risk outright. We'd advise road users, especially tradespeople, to treat the next eight months as a window to plan: look at whether owning a vehicle outright still makes sense against hiring only when you need one, and factor a rise of at least 5p next summer into budgets."
Practical's tips for keeping fuel costs down on a hire
- Choose the right size van, as a larger van than the job needs can cost more in fuel as well as hire.
- Plan the load to avoid extra trips. Measuring large items and loading heaviest first can cut return journeys.
- It’s important to check how fuel is handled on return, as you may find some companies handle it differently. Knowing the policy before collection avoids unexpected charges if pump prices change during a hire.
- Book with the date in mind, since hires that start after 1 July 2027 will be fuelled at the higher duty rate.
About Practical Car & Van Rental
Practical Car & Van Rental is a UK vehicle rental company with more than 150 franchised locations across England, Scotland, Wales, Northern Ireland and the Republic of Ireland. Founded more than 40 years ago, it combines the reach of a national brand with service from local, independently run branches. Practical offers car hire, including electric and hybrid models and vehicles with up to nine seats; van hire, from small courier vans to Luton vans with tail-lifts; and motorhome and minibus hire. It also offers flexible car and van leasing to businesses and private customers.
Sources
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