Yesterday's HMRC monthly tax receipts show fuel duty receipts for April 2025 to December 2025 are £18.5bn, which is £0.1m higher than the same period last year. The uptick reverses a two-year downward trend* which had been attributed to more motorists transitioning from petrol and diesel to electric and hybrid vehicles.

Sheena McGuinness, Co-Head of Energy and Natural Resources at RSM UK, said: “Fuel duty revenues increasing for the first time in two years could be a worrying sign of a slowdown in demand for hybrid and electric vehicles (EVs) and early indication of a post-Budget reaction.

“Despite range anxiety and the increased cost to buy an EV, one in four consumers were making the move but as some of the perks fall away, for instance road tax exemption and additional costs such as the introduction of a pay per mile scheme, we could see a slowdown in this progress. Whilst the data to date was a steady decrease in fuel duties, which correlates with the increase in new EV registrations over the last year, we are still way below the government’s 28% zero emission vehicle mandates. This latest reversal in the previous trend will likely further widen the gap between actual EV registrations.

“Hybrid vehicles are leading the way in popularity, as a half-way house before committing to full electric motoring. However, the budget delivered a double blow with an increase to fuel duty and the introduction of a new road tax for hybrids and EVs. Both policy changes have the potential to alter consumer behaviour.

“On one hand it might encourage some drivers to choose fully electric to avoid the extra fuel duty hit, or we could see drivers reverting to petrol cars, so fuel revenues could start to increase again. Particularly as the fuel duty increase doesn’t hit until September this year, and if inflation drops back closer to the 2% range as per expectations, then this should soften the fuel duty hit for motorists.”

*Revenues for 2025 were 18,509 between April-Dec, and 18,383 in 2024 and 18,936 in 2023.