Chancellor urged to scrap fuel duty hike amid petrol price warning
The conflict in the Middle East is set to push up the price of fuel at the pumps as supply is disrupted
The Chancellor has been urged to scrap the proposed hike in fuel duty amid concerns the conflict in the Middle East will “inevitably increase” the price of petrol.
Rachel Reeves announced last year that the long-held discount in fuel duty would be scrapped from September, with a 1p hike followed by two increases of 2p each in subsequent years.
But following US and Israeli strikes on Iran and widespread counter-attacks across the oil producing region, concerns have been raised about the impact of oil price hikes which could hit consumers at the pumps.
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The price of oil jumped has jumped to just above 80 US dollars a barrel, with some analysts suggesting it could rise above 100 dollars.
Speaking ahead of the spring statement, SNP economy spokesman Dave Doogan said: “With real fears that prices at the pump are now set to soar because of the situation in the Middle East – instead of stubbornly doubling down, the Chancellor needs to scrap her price hike plans before motorists face a devastating double hit.
“Oil prices are already spiking – the last thing motorists and businesses now need is another damaging tax hike from the Labour Party.
“The Chancellor needs to see sense, recognise what is unfolding globally, and immediately scrap her plans to hike prices at pumps.
“Everyone knows that Keir Starmer’s Labour Party has broken their promise to cut energy bills by £300 – it would be another slap in the face for families if Labour made the cost-of-living crisis even worse with a plan that will inevitably increase prices.
“After 14 U-turns from this chaotic Labour Government – scrapping their plans to hike fuel duty is one U-turn motorists, businesses and families right across Scotland would actually welcome.”
The AA said fuel prices will “inevitably increase” while the RAC said the conflict has the “potential to push up pump prices” but “it’s not a certainty”.
Disruption to tanker traffic in the Middle East following attacks in the Strait of Hormuz has sparked a rise in oil prices, which have a significant effect on wholesale fuel prices.
AA president Edmund King said much of the increase in oil prices since the start of the war was “being factored in by market traders” in advance.
He predicted that petrol prices could return to levels last seen at the start of 2026, when a litre of petrol was an average of 135.7p, compared with as low as 131.9p last month.
Mr King said: “Obviously, some global oil distribution disruption will continue depending on the length of the conflict and issues in the Strait of Hormuz.
“Pump prices in the coming weeks will inevitably increase, possibly in the short term back up to where they were at the start of the year.”
He went on: “There is no need for drivers to break their refuelling routine.
“It takes time for cost increases to work their way through to the pump.”
RAC head of policy Simon Williams said: “While the conflict in the Middle East undoubtedly has the potential to push up pump prices in the UK, it’s not a certainty.
“The oil price would have to rise significantly and stay that way for some time to have a dramatic effect.”
He added that oil prices reaching 100 dollars per barrel would take petrol prices “nearer to 150p per litre, but it’s all too soon to know”.
Andrew Watson, director at pump price comparison service PetrolPrices, said: “Global events over the weekend have pushed wholesale fuel costs sharply higher, and that is likely to feed through to UK pump prices in the coming days.
“Motorists should expect gradual price rises across both petrol and diesel.
Paul Barker, editor at magazine Auto Express, said the conflict is “likely to have a negative impact on oil prices in the short term”.
He continued: “The longer-term effects will depend on whether and how things escalate, but it’s not unreasonable to expect fuel prices to rise.”
The Prime Minister’s official spokesman said: “The Government is monitoring the situation closely.
“The UK benefits from strong and diverse security of energy supplies.
“The Energy Secretary (Ed Miliband) spoke to the executive director of the International Energy Agency (Dr Fatih Birol) over the weekend.”
The spokesman added: “There are currently no reported impacts to UK fuel supply.
“DESNZ (the Department for Energy Security and Net Zero) will continue to monitor UK fuel stocks and sales.”
A spokeswoman for the Treasury said: “We have extended the 5p fuel duty cut from this month to the end of August to support drivers across the country.”
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