'Cut 6p off pump prices' AA tells Chancellor

AA calls for further fuel duty cut

The AA is calling on the Chancellor to protect the existing 5p fuel duty cut at the Budget and go further by cutting duty by another 5p per litre.

In a letter to the Chancellor ahead of the Budget on 28 October, The AA warns that reversing the existing reduction would put further pressure on drivers at a time when pump prices have already risen sharply. Instead, The AA wants the existing 5p reduction maintained and an additional 5p-per-litre cut introduced.

What the proposed cut could save drivers

Once VAT is taken into account, the additional 5p cut would be worth around 6p per litre at the pump, if passed on in full. That would save approximately £3.30 when filling a typical 55-litre tank.

Compared with allowing the existing 5p reduction to disappear and making no further cut, the difference for a driver filling a 55-litre tank would ultimately be around £6.60. The call comes as drivers continue to face high pump prices. AA analysis of the Government's Fuel Finder data found that at the beginning of October 2,577 filling stations out of approximately 8,000 were charging £2 per litre or more for diesel.

Fuel costs, businesses and inflation

The AA says action on fuel duty would not only help drivers, but could also help businesses contain costs and limit wider inflationary pressures. Higher road fuel prices increase the cost of moving goods, making deliveries and providing services. Hauliers, tradespeople, delivery companies, retailers and service providers can all face higher costs when petrol and diesel prices rise, which can ultimately be passed on to households through higher prices.

VAT revenue and fuel duty

The AA is also asking the Treasury to take into account the additional VAT revenue** it receives as underlying fuel prices increase when costing a further reduction in fuel duty.

Edmund King on the call for a fuel duty cut

Edmund King, AA president, said: “Drivers need the Chancellor to put the brakes on rising fuel costs. The first step must be keeping the existing 5p fuel duty cut, but with prices rising we believe the Chancellor should go further and cut another 5p. If passed on in full, that additional cut would take around 6p off a litre at the pump and save around £3.30 when filling a typical family car.

“Allowing the existing cut to disappear would take drivers in precisely the wrong direction. Compared with that outcome, keeping the 5p reduction and going 5p further could make a difference of around £6.60 on a tank.

“Fuel prices aren't just an issue for motorists. Higher prices increase the cost of moving goods, making deliveries and running businesses, with those costs ultimately finding their way into household bills.

“As underlying fuel prices rise, the Treasury also receives more VAT. We believe the Chancellor should take that additional revenue into account and use the Budget to give drivers and businesses some breathing space.”

Fuel duty cut: questions and answers

What is The AA asking the Chancellor to do about fuel duty in the October 2026 Budget?

The AA is calling on the Chancellor to maintain the existing 5p-per-litre fuel duty reduction and introduce a further 5p-per-litre cut in the Budget on 28 October 2026. The AA believes this would help motorists facing rising petrol and diesel prices while reducing costs for businesses. If passed on in full, the additional reduction would lower pump prices by approximately 6p per litre, including VAT.

How much would drivers save if fuel duty was cut by another 5p per litre?

An additional 5p-per-litre reduction in fuel duty would save drivers approximately 6p per litre at the pumps once VAT is included, provided the reduction is passed on in full. According to The AA, this would save approximately £3.30 when filling a typical 55-litre fuel tank. The proposed reduction would apply alongside the existing 5p-per-litre fuel duty cut.

How much could drivers save compared with the Government reversing the existing fuel duty cut?

The AA estimates that maintaining the existing 5p-per-litre fuel duty reduction and cutting duty by another 5p would make a difference of approximately £6.60 when filling a 55-litre tank, compared with allowing the existing reduction to disappear. This calculation includes VAT and assumes the full reduction is reflected in pump prices.

Why does The AA want the Government to reduce fuel duty?

The AA believes reducing fuel duty would provide financial relief for motorists and businesses facing rising petrol and diesel prices. Higher fuel costs increase the expense of transporting goods, making deliveries and providing services. The AA argues that reducing these costs could help businesses and limit wider inflationary pressures on UK households.

How could cutting fuel duty help reduce inflation?

The AA believes lower petrol and diesel prices could help limit inflationary pressures by reducing transport and operating costs for businesses. Hauliers, delivery companies, tradespeople, retailers and service providers all face higher costs when road fuel prices increase. These additional expenses can ultimately be passed on to consumers through higher prices for goods and services. The AA argues that cutting fuel duty could help contain some of these pressures.

How expensive was diesel at UK filling stations in October 2026?

AA analysis of the Government's Fuel Finder data found that 2,577 filling stations out of approximately 8,000 were charging £2 per litre or more for diesel at the beginning of October 2026. This represented approximately one-third of the filling stations included in the analysis. The AA highlighted these prices as evidence of the financial pressures facing motorists and businesses.

Does the Treasury receive more VAT when fuel prices increase?

The AA says the Treasury receives additional VAT revenue as underlying fuel prices increase. The AA is asking the Chancellor to consider this additional revenue when assessing the cost of reducing fuel duty. According to Office for National Statistics consumer spending figures cited by The AA, VAT receipts associated with purchasing and maintaining cars increased by an estimated £374 million in the first six months of 2026 compared with the same period in 2025.

What has Edmund King said about cutting fuel duty?

Edmund King, AA president, has called on the Chancellor to protect the existing 5p-per-litre fuel duty reduction and introduce a further 5p cut. He argues that drivers need relief from rising pump prices and that lower fuel costs could also benefit businesses and households. The AA wants the Treasury to consider additional VAT revenue generated by higher fuel prices when deciding whether to reduce fuel duty.