Fuel Duty will not rise next year, after Chancellor Rachel Reeves announced she would maintain the freeze on the tax.

Fuel Duty is tax that affects anyone looking to purchase fuel for their car as well as people wanting to heat their home.

It has not risen in more than a decade, and was frozen between 2012 and 2022, before being cut by 5p in March 2022 when pump prices surged following Russia’s invasion of Ukraine.

The Chancellor announced the cut will remain in place, saying: “To maintain the 5p cut will cost £3 billion.

"I have concluded that in these difficult circumstances, while the cost of living remains high, increasing Fuel Duty next year would be the wrong choice.

"There will be no higher tax at the petrol pumps next year."

Speaking last month, the AA highlighted the impact Fuel Duty has on motorists.

AA president Edmund King said: “Pure and simple, the only reason why pump prices are nearly at a three-year low this week is because of the 5p fuel duty cut.

“Removing it threatens to send millions of low-income drivers back into the era of perma-high road fuel prices.

“Getting rid of the fuel duty cut unleashes a £3.30 a tank shock on the personal and family budgets of the 28% of drivers who spend a set amount when they go to a fuel station.

“That is more than nine million private motorists – most of whom are low-income and struggling to balance their budgets.”

Opening the Budget this afternoon, Ms Reeves said: “On July 4, the country voted for change. This government was given a mandate. To restore stability to our country and to begin a decade of national renewal.

“To fix the foundations and deliver change through responsible leadership in the national interest. That is our task. And I know we can achieve it.”

She said her “belief in Britain burns brighter than ever” but “the only way to drive economic growth is to invest, invest, invest”.

“There are no shortcuts. And to deliver that investment we must restore economic stability and turn the page on the last 14 years.”

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.