Labour is facing calls to abandon planned fuel duty increases set to take effect at the start of next year, with critics arguing the hikes will disproportionately harm families already struggling with rising costs.
Ministers are reportedly considering a series of fuel duty increases designed to address a shortfall in public finances. However, advocacy groups and opposition politicians are urging Chancellor John Healey to use the upcoming budget to reverse these plans, which were initially drawn up by his predecessor, Rachel Reeves.
The calls come as global fuel prices have surged to levels not seen since the early months of the Ukraine war, fueled by escalating tensions in the Middle East. The average price of unleaded petrol has risen to 172 pence per litre, while diesel now averages 195.3 pence per litre, with many stations already exceeding £2 for diesel, according to RAC Fuel Watch.
Howard Cox, director of the campaign group Fair Fuel UK, stated that the increasing 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 already reduced fuel duties in response to the Middle East crisis and implored Healey to follow suit.
Under current proposals, fuel duty is slated to increase by 3 pence per litre on January 1, followed by an additional 2 pence rise on March 1. The Treasury is also expected to end the 16-year freeze on fuel duty in April, adding another 1 pence per litre, with Value Added Tax (VAT) contributing a further 1.2 pence per litre. This cumulative increase of approximately 7.2 pence per litre would add nearly £4 to the cost of filling a typical family car.
Robert Jenrick, Reform UK's Treasury spokesman, attributed the current inflation rate of 3.1 percent, in part, to soaring petrol and diesel prices. 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 definitive decision has been made regarding the fuel duty increases. However, they acknowledged that maintaining the existing 5 pence fuel duty cut alone would represent an annual cost of £2.4 billion, a significant sum for a Chancellor already grappling with budgetary constraints.
A temporary 5 pence fuel duty cut was implemented by the previous Conservative government following Russia's invasion of Ukraine in 2022, which had triggered a sharp rise in fuel prices. While Reeves had initially planned to phase out this relief in September, the plan was postponed in light of heightened geopolitical events.