The budget 2021: how it affects drivers

  • Fuel price freeze
  • 'To aid economic recovery'
  • UK still has one of the highest fuel tax charges in Europe

Fuel duty rate freezes, electric car funding, and public infrastructure upgrades are the main talking points for drivers in the latest budget.

Unsurprisingly, fuel duty will remain the same for the 12th consecutive year, despite plans to increase it.

Promised in March, and reiterated in October's Budget in the House of Commons, Chancellor of the Exchequer, Rishi Sunak said he was: 'Not prepared to add to the squeeze on families and small businesses.'

Fuel duty

According to the RAC, petrol prices are at a record high of £1.42 per litre.

Founder of public affairs campaign group FairFuelUK, Howard Cox, said: 'This is great news and some relief for hard pressed drivers.

'But it was an opportunity missed too. With pump prices at their highest ever, meaning the Treasury is wallowing in a £1bn unexpected windfall, it was a time for the Government to have cut fuel duty significantly.'

Fuel duty will remain at 57.95 pence per litre for 2021-22. 

It costs £15 more to fill up an average family car than it did a year ago

Electric cars

Elsewhere in the Budget it was announced that £817 million will be given for the electrification of UK vehicles and their supply chains and to support investment in zero emission vehicle manufacturing, gigafactories and the electric vehicle supply chain. The idea behind this is that the UK will be at the forefront of the transition to zero emission vehicles

To support the uptake of electric vehicles, the government will provide an additional £620 million for public charging in residential areas and targeted plug-in vehicle grants.

While £49 million will be allocated to Northern Ireland via the Levelling Up Fund to upgrade its electric vehicle charging network.


£2.6 billion has been committed to local road upgrades, and more than £5 billion will be given to local road maintenance.

What this means for you

According to the government, the fuel duty freeze amounts to a saving of £8 billion over the next five years. Data from the RAC reveals that the average price of a litre of petrol could have reached 147p, taking the cost of an average tank of petrol to £80, if the planned price-hike went ahead. Ultimately the fuel freeze means the tax you pay on fuel remains the same for now.

And it looks as though your next electric car has a better chance of being British, thanks to the £817 million being dangled in front of car manufacturers to make electric cars in the UK.

Further reading

>> Car advice on Parkers

>> Why your next car might be bought on an app

>> Find out how much your car is worth with Parkers