Labour Faces Pressure to Halt Fuel Duty Hikes Amid Winter Cost Concerns
Campaigners and opposition parties urge the Chancellor to reconsider planned increases as fuel prices soar.
Labour is facing calls to abandon planned fuel duty increases set for early next year, with critics warning that the hikes will exacerbate financial hardship for families during the winter. The proposed increases come as ministers seek to address a shortfall in public finances.
Campaign groups are urging Chancellor John Healey to use the upcoming budget to scrap the planned rises, which were initially formulated by his predecessor, Rachel Reeves. Current pump prices for unleaded petrol have reached levels not seen since the start of the Ukraine war, with diesel prices frequently exceeding £2 per litre. According to RAC Fuel Watch, the average litre of unleaded is currently 172p, and diesel averages 195.3p.
Howard Cox, of Fair Fuel UK, stated that the rising fuel costs represent a "direct blow to household budgets, people's ability to work and their freedom to drive." He noted that 40 countries have reduced fuel duties in response to the Middle East crisis and advocated for the UK to follow suit. "If ministers want a policy that delivers real, tangible benefits within weeks, not years, they should start with the lever that works – cut fuel duty. It is time to stop taxing the engine of the economy and start powering it instead," Cox said.
A temporary 5p fuel duty cut, implemented by the previous Conservative government following Russia's invasion of Ukraine in 2022, was initially slated to be phased out by Ms. Reeves this month. However, this plan was postponed in light of recent international developments. Under the current proposals, fuel duty is scheduled to increase by 3p per litre on January 1, followed by an additional 2p rise on March 1. Furthermore, the Treasury is set to end a 16-year freeze on fuel duty, adding another 1p in April. Including VAT, this amounts to a total increase of approximately 7.2p per litre, which would add nearly £4 to the cost of filling a typical family car.
Robert Jenrick, Reform UK's Treasury spokesman, linked the escalating fuel prices to the current inflation rate of 3.1 percent. Richard Holden, a Conservative transport spokesman, described the planned increases as "completely untenable in the middle of a cost-of-living crisis."
Sources within the Treasury indicated that no final decision has been made regarding the fuel duty increases. However, retaining the existing 5p cut alone would represent an annual cost of £2.4 billion to the Treasury, at a time when Mr. Healey is reportedly facing challenges in balancing the national budget.