UK diesel up nearly 20p, but government still won’t extend 5p duty cut beyond August

Fuel duty exploded back into the political spotlight in the UK on 18 March, as MPs clashed over whether ministers should keep fuel tax relief in place while pump prices are rising again. The government’s answer was clear: no. The temporary 5p-per-litre fuel duty cut will still expire at the end of August 2026, despite growing pressure to keep it for longer.

That is the part UK hauliers need to watch. Under the current plan, the 5p relief will be unwound in three stages: +1p on 1 September 2026, +2p on 1 December 2026 and another +2p on 1 March 2027. So unless the government backs down, diesel duty will start rising from September even if fuel prices stay painfully high.

Opposition MPs used the Commons debate to attack the policy, warning that the planned increases would hit “drivers, farmers, businesses” at exactly the wrong moment, with oil prices climbing and fuel costs already back under pressure. For hauliers, the argument is obvious: why pile more tax onto diesel when operators are already being squeezed?

Ministers, however, refused to budge. The government insisted it had already done enough by extending the 5p cut to 31 August 2026 and cancelling the usual inflation-linked increase for 2026–27. Treasury minister Torsten Bell repeated that line in Parliament. In other words, Labour is not offering fresh relief — it is simply sticking to the existing phase-out plan.

For the freight sector, the political spin changes very little. Call it a tax rise or call it the end of temporary support — the outcome is the same: higher duty on diesel from autumn if nothing changes. HMRC’s published rates show diesel duty staying at 52.95p per litre until the end of August, then rising to 53.95p in September, 55.95p in December and 57.95p in March 2027.

The timing makes the row even more combustible. During the debate, Bell said oil prices had jumped 40% and gas prices around 64% since the end of February, a reminder that energy markets are once again moving in the wrong direction. So the real story here is not just that prices are rising; it is that the government is still pressing ahead with the withdrawal of fuel tax support anyway.

The Commons debate did not produce extra help for hauliers. It produced the opposite message: despite the latest fuel price surge, London is still sticking to the August deadline. If that position holds, UK operators will face an extra diesel tax burden from September on top of whatever the market is already doing to prices.

Diesel prices are rising even faster

The political row comes as diesel prices in the UK are climbing even faster than petrol, making the issue especially sensitive for hauliers. According to RAC Fuel Watch data published on 17 March, average diesel prices had risen by 19.7p per litre since 28 February, reaching 162.06p per litre. Petrol, by comparison, was up 9.5p to 142.29p. That matters because haulage operators are exposed to the part of the market that is rising hardest.

RAC said the squeeze on diesel users was already severe by mid-March. In its 17 March statement, the motoring organisation warned that diesel drivers were paying £11 more per tank than they were at the end of February, and said diesel appeared to be on a “crash course” towards an average of 170p per litre if oil stayed around $100 a barrel. For hauliers, that is the more alarming signal: diesel is not just going up, it is outpacing petrol.

The speed of the increase had already raised concerns days earlier. On 13 March, RAC reported that average diesel had jumped by almost 17p a litre since the start of the conflict, reaching 159.18p, which it said was the highest level since November 2023. RAC’s Simon Williams said diesel had “rocketed” by nearly 12% in less than two weeks.