The Unintended Consequences Of Freezing Fuel Duty

This report by Professor David Begg and Claire Haigh examines the unintended consequences of freezing fuel duty.

Increasing costs for road users is politically difficult. This is one of the reasons why we have had eleven years where fuel duty has been frozen at a time of historically low oil prices.  While the freeze has been welcomed by many road users and has undoubtedly been of benefit to people struggling on low incomes dependent on car travel, there have been some unintended consequences.

The Unintended Consequences of Freezing Fuel Duty was published by Greener Journeys in 2018 and demonstrated the wider impacts of the freeze in fuel duty 2011-18.

The analysis was updated in 2020 to take account of the continuation of the freeze in fuel duty. As a direct result of the freeze in fuel duty since 2011:

  • Traffic has grown by 5% causing more pollution and congestion
  • The increase in traffic has produced an extra 5 million tonnes of CO2 emissions
  • The increase in traffic has produced an extra 15,000 tonnes of NOx emissions
  • Freeze has led to £250 million fewer bus journeys and £75 million fewer rail journeys
  • The nine year freeze has cost the Treasury more than £50 billion. Freezing fuel duty costs the Treasury approximately £7 billion every year in revenue foregone.