HMRC has published new advisory fuel rates (AFRs), bringing reductions across the board for petrol- and diesel-engined cars but maintaining the rate for fully electric cars.

Petrol and diesel rates fall by 1-2ppm

The AFRs, used to reimburse employees for business travel in their company cars, are effective from 1 March 2024 and based on latest petrol and diesel prices taken from the Department for Energy Security and Net Zero (DESNZ).

All petrol and diesel rates fall by 1ppm, with the exception of the rate for larger-engined petrol cars (over 2000cc), which drops by 2p to 24ppm. However, LPG rates, which are based on figures from the AA, rise.

The drop in AFRs comes on the back of a downward trend on petrol and diesel prices. However, latest RAC data shows fuel prices have shot up in the last three weeks on the back of a jump in the price of oil. The latter is due to the Red Sea attacks by Houthi rebels, but also global refinery maintenance closures, the start of America’s driving season and UK retailers buying more fuel stocks ahead of the Budget to protect against a possible fuel duty hike by the Chancellor.

The advisory electric rate remains at 9ppm for the upcoming quarter following the drop from 10ppm in the last round of changes on 1 December 2023.

The new AFR tables are as follows (old rates in brackets):

Electric

From 1 March 2024, the advisory electric rate for fully electric cars will be 9 pence per mile.

Hybrid cars are treated as either petrol or diesel cars for AFR purposes.

The previous rates can be used for up to one month from the date the new rates apply.

The full list of rates can be viewed here, along with the tables for calculating them.