Keir Starmer on Wednesday left the door open for yet another U-turn over Labour’s hated fuel duty hike following days of mounting pressure to scrap it.
The Prime Minister said he would keep the tax rise ‘under review’ after being accused of using drivers as ‘cash cows’ to help pay for his benefits spending splurge.
During a fiery Prime Minister’s Questions, Tory leader Kemi Badenoch warned Sir Keir six times that now was not the time to press ahead with plans to pile higher costs onto drivers.
She said spiralling pump prices sparked by the Iran war meant some motorists were already having ‘sleepless nights’.
Paving the way for his 15th U-turn, a visibly flustered Prime Minister said: ‘Fuel duty is frozen. It’s going to remain frozen until September and we will keep the situation under review in light of what’s happening in Iran.’
It came after the Chancellor suggested she would be reluctant to scrap the fuel duty hike when asked by MPs on the Commons Treasury committee.
Rachel Reeves said: ‘I’m very loath to spend government money on something that the market should be doing itself and that’s why greater competition and greater transparency about pricing is so important.’
But she did leave room for an about-turn and, speaking more broadly about the Iran conflict, Ms Reeves added that it was ‘certainly not good for the British economy to have trade disrupted’ by the crisis.
Prime Minister, Sir Keir Starmer (pictured at Prime Minister’s Questions) said he would keep the tax rise ‘under review’
Kemi Badenoch (pictured at Prime Minister’s Questions) warned Sir Keir six times that now was not the time to press ahead with plans to pile higher costs onto drivers
Threats from Tehran have restricted shipping through the Strait of Hormuz – a vital route for oil and gas supplies – pushing up prices.
The Chancellor announced in last year’s Budget that fuel duty would increase by 5p a litre from this September – adding more than £3 to the cost of a fill-up. It is the first such hike for 15 years.
Reform UK and the Tories have both pledged to scrap the hike if they win the next election.
Meanwhile, garages were accused of using the conflict as cover to fleece drivers after the difference between the cost of a fill-up at the cheapest and most expensive forecourts grew to £35.
Pump prices have soared at their fastest rate since March 2022, a month after Ukraine was invaded. Analysis by the Daily Mail found the cheapest per litre price for standard diesel in the UK was 121.58p on Tuesday. But the dearest was a staggering 186p.
It means a fill-up for the average 55-litre tank in a family car would now cost £102.30 at the latter. The Mail analysed thousands of data entries from retailers on the Government’s Fuel Finder platform.
And figures from the RAC showed average petrol pump prices jumped nearly 7p a litre to 139.64p between February 28, when the conflict started, and yesterday. Diesel jumped by nearly 15p to 157.19p.
Motoring groups said the chasm suggested some forecourts may be using the soaring oil prices as cover to ‘price gouge’.
Elsewhere, the UK-backed International Energy Agency said its 32 members have agreed to release a record 400 million oil barrels from its strategic reserves to help stabilise markets.
It is hoped this could stabilise pump prices after they surged past $100 a barrel on Monday.
After Sir Keir spoke to G7 leaders on Wednesday, a spokesman said: ‘The Prime Minister reiterated the importance of working together to guarantee freedom of navigation in the Strait.’
