Business

Reeves Set to Scrap Autumn Budget Fuel Duty Hike After FairFuelUK Push

Published

2 hours ago

18 May 2026

Reeves Set to Scrap Autumn Budget Fuel Duty Hike After FairFuelUK Push

For the umpteenth time in 16 years of campaigning, the Westminster fuel-tax script appears to be writing itself again.

According to Treasury sources briefing the FairFuelUK campaign, Chancellor Rachel Reeves is preparing to drop the planned fuel duty rise from her Autumn Budget, though insiders caution that any reprieve is unlikely to survive beyond the March 2027 Financial Statement.

The retreat, if confirmed at the despatch box, will be the latest chapter in a saga that has become a fixture of every fiscal event since George Osborne first froze the duty in 2011. It will also be a notable, if temporary, win for Britain’s 5.5 million small businesses, many of whom now describe forecourt costs as the single biggest unhedgeable line in their operating budgets.

A £3bn pump tax raid since the Iran crisis began

Since hostilities flared in the Gulf, drivers have paid an estimated £3 billion more to fill up, while the Treasury has banked close to an additional £500 million in VAT receipts off the back of higher pump prices alone. Oil majors, predictably, have reported bumper margins. The motorist, equally predictably, has been left to foot the bill.

That contrast – soaring corporate profits set against a stagnating consumer economy – is what has put fuel duty firmly back on Reeves’s desk. As Business Matters reported last month, the Middle East flare-up has dragged headline inflation back to 3.3 per cent, hitting transport-heavy SMEs hardest of all.

71,000 emails, 148,000 signatures and counting

FairFuelUK says more than 71,000 of its supporters have now emailed their MPs urging the Chancellor to abandon the Budget hike. A separate petition, which has gathered more than 148,000 signatures, will be hand-delivered to the Treasury in the coming weeks. The campaign is calling not only for the freeze to be extended but for an immediate cut in fuel duty, in line with measures taken by more than 40 other countries.

The lobbying push echoes the cross-party effort earlier this year, when MPs delivered an earlier tranche of FairFuelUK signatures to Downing Street. That campaign cited Centre for Economics and Business Research analysis suggesting any short-term Treasury bounce from raising duty would be wiped out by a collapse of more than 60 per cent in fuel-tax income within five years as drivers cut mileage and shift to EVs.

“Cut all fuel taxes now,” says Cox

Howard Cox, founder of FairFuelUK, was characteristically blunt. “This clueless, bankrupting net-zero-driven Government remains stuck in a state of torpor, keeping the UK economy virtually stagnant,” he said. “Time and again, over 16 years of campaigning, we have shown that lower fill-up costs deliver more tax to the Treasury by boosting other revenue streams. The current cost of petrol, particularly diesel, is crippling motorists’ and small businesses’ ability to spend in the economy. When will these ignorant Treasury politicians understand that more money in people’s pockets drives growth? For goodness’ sake, cut all fuel taxes now.”

His frustration is shared in the haulage yards, trades vans and rural high-street economies that keep much of the SME sector ticking. Diesel, the lifeblood of British logistics, remains stubbornly above £1.55 a litre in many regions, and as Business Matters has previously documented, small employers lack both the financial resilience and the pricing power of their corporate counterparts to absorb or pass on the cost.

The international comparison: Britain stands almost alone

What is striking about Cox’s argument is not the rhetoric but the international evidence behind it. The International Energy Agency’s 2026 Energy Crisis Policy Response Tracker lists more than 40 countries that have actively cut, suspended or capped fuel taxes since the Iran conflict began. Britain is conspicuously not on the list.

Among the most striking moves logged by the IEA as of late April:

Germany has cut petrol and diesel duty by roughly 14–17 euro cents a litre.
Spain has slashed fuel VAT from 21 to 10 per cent and suspended its hydrocarbon excise duty.
Poland has cut fuel VAT from 23 to 8 per cent and reduced excise duty to the EU minimum.
Ireland has trimmed excise on petrol and diesel by €0.15–0.20 a litre, plus related levies.
India has taken excise duties on petrol and diesel close to zero in some categories.
Canada has suspended its federal fuel excise tax.
Australia, Austria, Belgium, Croatia, Cyprus, Czechia, Hungary, Iceland, Italy, Korea, Latvia, Lithuania, the Netherlands, Norway, Portugal, Romania, Serbia, Slovenia, South Africa, Sweden and Türkiye have all implemented some form of fuel-tax or duty relief.
Emerging markets including Argentina, Brazil, Cambodia, Ghana, Kenya, Lao PDR, Namibia, the Philippines, Saint Kitts and Nevis, Vietnam and Zambia have followed suit, often with measures targeted at hauliers and small operators.

By contrast, the UK has so far stuck rigidly to the 5p Spring 2022 cut and a series of frozen rates, an approach that according to Office for Budget Responsibility forecasts is already pencilled in to deliver a £2.2 billion uplift in fuel duty receipts in 2027–28 once the 5p cut is fully unwound and RPI indexation resumes.

What it means for SMEs

For business owners, the politics matter less than the planning. A scrapped Autumn hike will provide short-term breathing room for fleet operators, tradespeople and rural businesses heading into the winter, but the OBR’s own numbers make clear that the reckoning has merely been postponed. Any operator modelling 2027 cash flow would be wise to assume duty rates will rise sharply once the temporary cut expires and indexation kicks back in.

The deeper question for the SME community is whether the Chancellor is prepared to follow the IEA-tracked majority and use fuel taxation as an active lever to support growth, or whether she will continue to treat the duty as a guaranteed revenue stream to be quietly squeezed. On the evidence of 16 years of campaigning, FairFuelUK is bracing for the latter – even as it prepares to claim a tactical victory in the Autumn.

For now, Britain’s van drivers, hauliers and white-van entrepreneurs can breathe a cautious sigh of relief. The bigger fight, as ever, is in the spring.

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.

Published

1 hour ago

18 May 2026

NewsAdmin

Oil touches 2-week high after drone attack on UAE nuclear power plant

SINGAPORE: Oil prices extended gains on Monday as efforts to end the U.S.-Israeli war on Iran appeared to have stalled, after a nuclear power plant in the United Arab Emirates came under attack and as U.S. President Donald Trump is expected to discuss military options on Iran.

Brent ‌crude futures ⁠climbed $1.44, or ⁠1.32%, to $110.70 a barrel by 2337 GMT after touching the highest since May 5 earlier in the session.

U.S. West Texas Intermediate was at $107.26 a barrel, up $1.84, or 1.75%, following a rise to its highest level since May 4.

Both contracts gained more than 7% last week as hopes of a peace deal that would end ship attacks ⁠and seizures ‌around the Strait of Hormuz dimmed. Last week’s talks between Trump and Chinese President Xi Jinping ended without an ⁠indication from the world’s top oil importer that it would help resolve the conflict.

Drone attacks on the UAE and Saudi Arabia and rhetoric from the U.S. and Iran raised concerns of an escalation in the conflict.

Emirati officials said they were investigating the source of the strike on the Barakah nuclear power plant and that the UAE had the full right to ‌respond to such “terrorist attacks.”
Saudi Arabia, which intercepted three drones that entered from Iraqi airspace, warned it would take the necessary operational measures to respond ⁠to any attempt to violate its sovereignty and security. “These drone strikes are a pointed warning – renewed U.S. or Israeli strikes on Iran could trigger more proxy attacks on Gulf energy and critical infrastructure by Iran or its regional proxies,” IG market analyst Tony Sycamore said.

Trump is expected to meet top national security advisers on Tuesday to discuss options for military action regarding Iran, Axios reported.

Business

Venezuelan mother dies 10 days after state confirms missing son died in custody

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1 hour ago

18 May 2026

NewsAdmin

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Business

Global Market Today: Asian shares slip, oil prices pile pressure on bonds

Published

1 hour ago

18 May 2026

NewsAdmin

Global Market Today: Asian shares slip, oil prices pile pressure on bonds

SYDNEY: Asia share markets slipped on Monday as fresh drone attacks in the Gulf pushed up oil prices and bond yields, while the AI boom is set to be tested by earnings from tech-diva Nvidia this week.

A drone strike caused a fire at a nuclear power plant in the United Arab Emirates, while Saudi Arabia reported intercepting three drones, as U.S. President Donald Trump warned that Iran must act “fast” to reach a deal.

Meanwhile, the vital Strait of Hormuz remains closed to all but a trickle of shipping as Tehran tries to formalise its control of the waterway that used to carry 20% of the world’s oil trade.

“The closure is draining global oil inventories fast,” warned analysts at Capital Economics. “Inventories could reach ‌critical levels by end-June, setting ⁠the stage ⁠for Brent at $130-140pb, if not higher.”

“If the strait is closed through year-end and oil stays around $150pb into 2027, that would push inflation to near 10% in the UK and euro zone, send rates back to their recent peaks and lead to global recession.”

Brent was trading up 1.2% at $110.63 a barrel, while U.S. crude climbed 1.0% to $106.42 a barrel. [O/R]
G7 finance ministers gather in Paris on Monday to discuss the Strait of Hormuz and critical raw material supplies, even as geopolitical differences threaten to test the group’s cohesion. Concerns energy costs would stay high and thus continue to drive inflation, saw global bond markets hammered on Friday.

Yields on U.S. 10-year notes were up at 4.584%, having surged 23 basis points last week, while 30-year bonds stood at 5.109% after jumping 18 basis points on the week.

Investors in turn feared central banks globally would have ⁠to tighten to ‌head off an inflationary spiral, and a hike from the Federal Reserve is now seen as a 50-50 chance this year.

Minutes of the Fed’s last meeting are out on Wednesday and should show how much pressure there was on the committee for a shift to a neutral stance, ⁠and away from an easing bias.

Japan’s Nikkei eased 0.4%, having fallen 2% last week though that was from record highs. South Korean stocks fell 2.1%, as the red-hot market cooled just a little after demand for semiconductors drove it to all-time peaks.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.6%. China’s markets hit their highest in more than four years last week, but will have to weather data on April retail sales and industrial output later in the session.

AI, RETAIL EARNINGS TO TEST THE BULL RUN
S&P 500 futures fell 0.4% and Nasdaq futures lost 0.5% in early trade.

While Wall Street has been supported by upbeat earnings, analysts at Citi noted half of the boost to earnings came from one-time items such as tariff add-backs and asset mark-ups. Both the gains in profits and the overall indexes were also tightly based.

“We identify 20 stocks that contributed the majority of index earnings ‌upside,” wrote analyst Scott Chronert in a note. “Forward guidance increases also show a similar narrow focus.”

“Broadening is a necessary condition for meaningful index upside from here,” he added. “This will require a better line of sight to the Iran conflict wind-down.”

The all-important AI trade will be tested by earnings from Nvidia due on Wednesday, where expectations are sky ⁠high for the world’s most valuable company.

Nvidia shares are up 36% since the March low, while the Philadelphia SE semiconductor index has surged more than 60%, amid voracious demand for chips as tech companies spend massively to build AI-related infrastructure.

Also due this week are results from a host of retailers led by Walmart, which will provide an insight into how consumers are faring with high energy prices.

In forex markets, risk aversion has tended to benefit the greenback as the world’s most liquid currency. The U.S. is also a net energy exporter, giving it a relative advantage over Europe and much of Asia.

The euro sat at $1.1620, after losing 1.4% last week. The pound wallowed at $1.3318, having dived 2.3% last week as political instability added to already intense pressure on the gilt market.

The dollar held firm on the yen at 158.64, with only the threat of Japanese intervention preventing another speculative assault on the 160.00 chart barrier.

In commodity markets, gold was flat at $4,540 an ounce, having drawn little support so far as a safe haven or as a hedge against inflation risks. [GOL/]