Decisions on fuel duty are made as part of the Budget process. Government policy are that fuel duty should increase each year at least in line with inflation, as the UK seeks to reduce polluting emissions from fossil fuels, and fund public services.
The Chancellor considers a range of factors when deciding rates of fuel duty, including social, environmental and economic costs. Budget 2007 therefore announced that main road fuel duty would rise by 2p per litre in 2008. However, in order to respond to short-term economic conditions, at Budget 2008, it was announced that this duty increase would be deferred to 1 October 2008.