Rachel Reeves could be under intense pressure to hike fuel duty fees for petrol and diesel drivers for the first time in 15 years in the coming months. According to the Sun, the Chancellor is due to receive a report from the Office of Budget Responsibility, detailing what is needed to bring the Government finances under control.
The report is understood to demand savings of up to £30billion in a bid to plug black holes in the public finances. Apparently, the OBR assumes the 5p cut to fuel duty introduced by the Conservatives back in 2022 will be reversed before her Spring Budget in March. Despite speculation that fuel duty would be under threat at previous Budgets, Labour has continued to extend the reduction since taking office.
Under current rules, the 5p reduction has been extended until 22 March 2026, with previous planned increases in line with inflation for 2025 and 2026 ditched. Officials said retaining the fuel duty freeze had led to a reduction of around 7p per litre in petrol and diesel rates in comparison to previous plans.
However, leading campaign group FairFuelUK claims they reliably hear the Chancellor is looking at hiking fuel duty by up to 10p per litre. They claimed that with VAT rises, motorists would really face a 12p per litre hike or around a £6 increase in the cost of filling up a family car.
Despite the concerns, FairFuelUK admits that getting the Government to keep costs lower this time around could be a harder task than in previous years.
The campaigners told supporters: “Please don’t underestimate just how much of a difference you make. We must ensure it happens again, but preferably by getting a cut in this regressive tax. This will indeed be our most intense lobbying battle since 2010.
“Had you and other supporters not backed FairFuelUK in the last decade, petrol and diesel could now be running at £2.20 per litre. Consider what those sky-high prices would have done to inflation, economic growth, business investment, job creation, and your disposable income.”
HM Revenue and Customs (HMRC) has previously revealed that the cut to fuel duty was having a positive impact on around 36 million individuals.
Meanwhile, they admitted that lower fuel duty fees will benefit businesses and civil society organisations where fuel is part of the ongoing running costs.
Express.co.uk has contacted the Treasury for comment.
