The latest Advisory Fuel Rates (AFRs) for company car mileage reimbursements have been released, introducing slight increases for certain petrol and diesel vehicles.
Effective from 1 March 2025, the revised rates include a 1 pence per mile (ppm) increase for mid-sized petrol engines (1401cc to 2000cc) and a 1ppm rise for smaller diesel engines (1600cc or less). However, the Advisory Electric Rate (AER) remains unchanged at 7ppm for fully electric vehicles.
New Advisory Fuel Rates for March 2025 have been
announced. (Credit: Pixabay)
Fuel price rises continue
The adjustments follow a continued surge in fuel costs, with petrol and diesel prices rising for the fourth consecutive month in January. According to RAC data, these increases have been driven by climbing oil prices.
The new AFRs are calculated using the latest fuel price data from the Department for Energy Security and Net Zero (DESNZ), while LPG rates are sourced from the Automobile Association. Businesses can continue using the previous AFRs for up to a month after the new rates come into effect.
Updated AFRs from 1 March 2025
Petrol and LPG Rates:
| Engine Size | Petrol (ppm) | LPG (ppm) |
|---|---|---|
| 1400cc or less | 12p (unchanged) | 11p (unchanged) |
| 1401cc to 2000cc | 15p (+1p) | 13p (unchanged) |
| Over 2000cc | 23p (unchanged) | 21p (unchanged) |
Diesel Rates:
| Engine Size | Diesel (ppm) |
|---|---|
| 1600cc or less | 12p (+1p) |
| 1601cc to 2000cc | 13p (unchanged) |
| Over 2000cc | 17p (unchanged) |
Electric rate:
The Advisory Electric Rate (AER) remains at 7ppm for fully electric vehicles. Hybrid models continue to be classified under petrol or diesel categories for AFR purposes.
The AER is determined using electricity price data from DESNZ, vehicle consumption figures from the Department for Transport, and business fleet sales trends compiled over the past three years by Fleet Audits.
For further details on AFR calculations and historical rates, visit the official advisory fuel rate page.
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Author: Pete Barden:
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Pete Barden is a qualified journalist who has written and produced for publications including The Sun (thesun.co.uk), New Statesman Media Group, Whatcar? (Whatcar.com) Stuff Magazine (Stuff.tv), Fastcar Magazine (Fastcar.co.uk), Maxim Magazine and UK broadcast stations within the Heart network (Formerly GCAP). Pete specialises in motoring and travel content, along with news and production roles. You can find out more about Pete Barden on LinkedIn.
