The Role of Fuel Duty in Fleet Costs and How to Manage It Effectively
It's an important variable in your fleet's operational cost, especially in a time when fuel prices are rising, but what exactly is fuel duty? How does it affect your fleet today? And most importantly, how can you manage it effectively to prevent it from draining your resources?
In this blog post, we're going to take a deep dive into the world of fuel duty and share some practical ways to help you keep your fuel costs under control.
What is the current rate of Fuel duty?
Following the 2025 Autumn budget, Fuel duty will remain at the current rate of 52.95 pence per litre until September 2026, extending the temporary 5p per litre cut for five more months.
The temporary cut introduced in 2022 will be reversed gradually, as outlined below, with fuel duty then being uprated in line with inflation from April 2027.
Timetable for reversal of temporary cut in fuel duty:
- 1p increase from 1 September 2026
- 2p increase from 1 December 2026
- 2p increase from 1 March 2027 (returning duty to the pre-March 2022 level).
This rate applies to most types of fuel used in road vehicles, including unleaded petrol, diesel, biodiesel, and bioethanol, while some alternatives, such as Liquefied petroleum gas (LPG), natural gas, and electricity, have lower rates or are exempt altogether.
How to keep fuel costs under control
Upgrading to vehicles with higher fuel efficiency can significantly reduce the volume of fuel required, hence reducing the impact of fuel duty on your fleet's overall fuel costs. It's worth upweighting fuel efficiency in your vehicle selection priorities and incentivising your drivers (especially ‘grey fleet’ drivers who may receive fuel expenses) to do the same.
Opting for vehicles powered by alternative fuels such as electric or hybrid can significantly reduce your fuel costs. This decision can also support your fleet’s sustainability goals and reduce maintenance costs.
Ensuring efficient route planning can considerably reduce your fleet's fuel consumption. Optimising routes to minimise travel distances and idling times is one way you and your drivers can achieve this.
By implementing systems to track fuel consumption for each vehicle in your fleet, you can easily identify areas where fuel usage can be minimised. Active fuel management can thus help reduce your overall fuel costs and lessen the impact of fuel duty.
Don't let the complexities of fuel duty weigh heavily on your fleet management responsibilities.
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