Fuel Duty is an important tax in the UK and affects anyone looking to purchase fuel for their car as well as people wanting to heat their home.

Major changes are expected to be made in the October Budget which could affect how much you need to pay for fuel.

If you're interested in learning more about how Fuel Duty works and how it affects you, here is everything you need to know.

What is Fuel Duty and how does it work?

Fuel Duty is a tax levied on the purchases of petrol, diesel and any other fuel sources intended for vehicles and heating.

According to the Office for Budget Responsibility, this represents a "significant source of revenue" for the Treasury with it raising around £25 billion in 2023 and 2024.

Fuel Duty is taxed per unit of fuel with the rate paid by those in the UK depending on the fuel type.

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How much is Fuel Duty in the UK and how have rates changed over the years?

At the time of writing, the "headline rate" paid for petrol and diesel is 52.95 pence per litre. This rate has been frozen since 2011.

A temporary five-pence cut was made in 2022 and was extended to 2024 and 2025, according to the UK Government website.

When and why was Fuel Duty introduced?

Fuel Duty was introduced to the UK after the introduction of the Finance Act of 1910 (sometimes called the People's Budget). 

To begin with, the then-Petrol Tax was set at 3d (£0.013) per UK gallon. It is now used to help provide revenue for the Treasury, assist in the maintenance of road infrastructure and deter excessive fuel usage.