Fuel duty change risks inflation timebomb, says Logistics UK

Commenting on Chancellor Rachel Reeves’ announcement in the Budget of an increase in fuel duty from September 2026, Logistics UK Acting Chief Executive Kevin Green said, 

“Instead of nurturing the green shoots of economic recovery, the government risks stamping them out. The increase in fuel duty announced in the Budget will mean hundreds of millions in increased taxes for logistics businesses, much of which will be passed onto households and businesses, as well as hitting motorists directly – fuelling inflation across the economy.

"It is a short-sighted decision that fails to appreciate logistics’ role in the economy – logistics costs are embedded in all products from food and medicines to construction materials and consumer goods: increasing logistics taxes mean increased costs for everyone.  

“Logistics businesses already pay around £5.5 billion a year in fuel duty – increasing the tax burden on our industry shows a disregard for a sector that generates £170 billion for the UK economy, employs over 8% of the nation’s workforce and is key to the government’s growth agenda.

"We urge the Chancellor to reconsider this decision at the earliest possible opportunity, or risk an inflationary impact right across the economy in the spring.” 

Read the full Autumn Budget 2025 here.