UK van drivers face £2.5bn diesel cost rise as fuel duty increase looms

Hauliers and motoring groups urge chancellor to scrap planned rise and help operators

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Millions of British van drivers face a combined £2.5bn increase in diesel costs this year, according to new analysis, as record pump prices and a planned fuel duty rise intensify pressure on the government ahead of the budget.

Millions of British van drivers face a combined £2.5bn increase in diesel costs this year, according to an analysis for the Guardian, intensifying pressure on the government to abandon a planned fuel duty rise.

Owners of diesel vans and pickups are expected to spend almost £8.5bn at the pump in 2026, compared with £5.95bn last year, the analysis by Moneysupermarket found. That follows diesel prices climbing to record highs amid a global fuel shortage caused by disruption to refineries in the Middle East and Russia, compounded by the US-Israel war on Iran. The average pump price passed £2 a litre for the first time this month, up more than 40% since late February.

The figures suggest the average van driver's fuel bill could reach £1,965 this year, up from £1,294 in 2025. About 95% of light commercial vehicles still run on diesel, and the van fleet has grown with online shopping, home deliveries and the rising number of self-employed tradespeople.

Industry groups are calling on the chancellor to scrap the planned fuel duty rise, which would add 3p a litre from 1 January and a further 2p from 1 March, after being postponed from September.

Richard Smith of the Road Haulage Association said members run on margins of around 2% and are spending “many thousands extra every week on fuel”. He said the duty rise would be “a hammer blow” and that “a fuel duty hike is a food price hike”. The RHA wants a 15p a litre rebate for British van, coach and haulage operators, similar to help offered in Spain, France and Italy.

The RAC said diesel remains about 57p a litre higher than before the US-Iran conflict, with petrol 42p higher, adding £31 and £23 respectively to the cost of filling a family car. Its head of policy, Simon Williams, said this year is “still set to be the second most expensive year on record for drivers” and urged the government to extend the fuel duty cut or reduce VAT on fuel.

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Analysis

Why This Matters

  • The cost pressure falls on millions of van-dependent businesses and self-employed tradespeople, and is likely to feed through to food and goods prices for households.
  • The planned fuel duty rise is a political decision for the upcoming budget, with the government choosing between revenue and cost-of-living relief.
  • With 95% of light commercial vehicles still diesel-powered, there is little immediate protection against pump price shocks.

Background

Diesel prices have climbed to record highs this month, passing £2 a litre for the first time, after the US-Israel war on Iran disrupted crude and refined oil supplies from the Gulf. The government postponed a planned fuel duty rise from September, and now faces a decision on whether to proceed with increases in January and March.

Key Perspectives

Van and haulage operators: The Road Haulage Association says margins of about 2% leave firms exposed to surging fuel bills, and argues that adding duty on top would be “a hammer blow”. It wants a 15p a litre rebate for commercial operators, matching help offered in Spain, France and Italy. Motorists and the RAC: The RAC points to pump prices still well above pre-conflict levels and says the government could ease the burden by extending the fuel duty cut or reducing VAT on fuel. Critics and fiscal concerns: Scrapping or delaying the duty rise would reduce tax revenue at a time of strained public finances, and ministers may be reluctant to set a precedent of retreating from a previously announced policy.

What to Watch

  • The UK budget announcement and whether the chancellor extends the existing fuel duty cut or introduces an operator rebate.
  • Diesel pump prices over the next few months, ahead of the planned 3p duty increase on 1 January.
  • Signs that retailers are passing higher logistics costs on to food and goods prices.

Sources

Zotpaper

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