A planned increase in fuel duty has been scrapped to assist motorists grappling with soaring pump prices triggered by the conflict in Iran.
Extension of Fuel Duty Cut
Prime Minister Sir Keir Starmer informed MPs that the 5p per litre fuel duty reduction, initially introduced by the Conservative government in March 2022, would be extended through the remainder of the year. Previously, rates were scheduled to rise starting in September, with a gradual return to prior levels over five years.
Impact of Iran Conflict
Iran's restrictions on tanker movements through the Strait of Hormuz have driven up costs. The average price of a litre of petrol and diesel at UK forecourts is now 26p and 44p higher, respectively, than before the conflict erupted on February 28.
Sir Keir stated: “Families across the United Kingdom are facing impacts of a war that we did not choose.” He added: “This is not our war, but while the parties opposite wanted to jump into it, Labour will always protect working people.”
Expert Reaction
Steve Gooding, director of the RAC Foundation, commented: “Although today’s news on fuel duty won’t have the immediate effect of bringing forecourt prices down, at least it shows that ministers have registered the financial pain caused by rampant pump prices for individuals and for business. Since the start of the Iran conflict, drivers have already paid a war premium of a staggering £3 billion in inflated fuel prices, half-a-billion of which has gone to the Exchequer in VAT receipts.”
Support for Hauliers
Sir Keir also announced a “12-month road tax holiday” for hauliers. The Treasury confirmed they would pay £1 at their annual renewal, saving £600 for a typical heavy lorry and £912 for the largest vehicles on the road.
