The latest HMRC monthly tax receipts show fuel duty receipts from April 2026 to September 2026 were £12.5bn, which is £0.2bn higher than the same period last year.

Commenting on the latest data, Sheena McGuinness, Co-head of Energy and Natural Resources at RSM UK said: “Fuel duty revenues are demonstrating surprising resilience in the face of UK energy transition goals, high petrol and diesel prices and fuel rationing fears. It comes as the combined impact of new milage charges, widening cost disparities between public and private charging and possible tariffs on Chinese-made vehicles risk eroding the appeal of EVs to consumers. While this marks bad news for the UK’s transition goals, it could provide the government with the benefits of a further, short-term boost to fuel duty revenues.

“As the Autumn Budget approaches, the Chancellor faces an uncomfortable dilemma. Extending the ‘temporary’ 5p-per-litre cut in fuel duty, which is considered likely, could provide short-term relief at the pump but would leave a larger hole in the government's finances at a time when fiscal headroom is already limited. However, increasing fuel duty risks placing additional strain on households already facing higher energy costs, mortgage costs and food prices.

“The long-term erosion of fuel duty revenue also can’t be ignored. Fuel duty once accounted for as much as 8% of UK tax revenues but today contributes only around 2% of total receipts. As the transition to electric vehicles accelerates, that contribution will continue to come under structural pressure, leaving the Treasury with an increasingly significant question over how it replaces those revenues.

“The government's eVED consultation says fuel duty revenues could fall by 50% in the 2030s, which could represent a £12bn hole, as motorists transition away from petrol and diesel. The proposed pay-per-mile electric Vehicle Excise Duty (eVED) scheduled for April 2028 could help replace lost revenue but must be balanced against the risk of additional charges deterring consumers from switching to electric.

“Energy Profits Levy (EPL) data remains absent, at a time when timely and transparent reporting is of paramount importance, to help inform the debate on energy security and investment. Previously this data was released every quarter, but has become increasingly sporadic since the rate increase announcement in July 2024, with only 2 data releases so far this year.

Historical data shows that EPL revenues continue to fall below predictions made in July 2024 that an increase in EPL rate would raise an additional £6bn in tax revenues to fund the majority of GB Energy. This raises questions around how the newly announced GB Grid initiative will be funded, if funding is to be allocated from GB Energy’s capital allocation which has not materialised. We would therefore welcome greater clarity around how the GB Grid will be funded in the Autumn Budget.

“With the government ruling out new exploration licences, decisions on developments such as Rosebank and investment linked to existing North Sea infrastructure become increasingly important. Operators continue to reassess investment decisions while restrictions on future licensing have increased uncertainty across the basin, as highlighted by Ithaca Energy saying it ‘probably wouldn’t’ invest in the North Sea if Rosebank did not receive government approval, which has been sitting in limbo for almost two years. It will be interesting to see if the government’s approval of the Jackdaw gas field, approved today, paves the way for Rosebank, as the UK looks to reduce its reliance on imported energy to meet our energy needs.

“A rise in Energy Profit Levy receipts would demonstrate the value that the sector can generate for the treasury, but that tax base can only be sustained if businesses remain willing to invest.”

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