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Chancellor Rachel Reeves is facing increasing pressure to abandon a planned fuel duty increase, as campaigners argue that British drivers are being treated as a “cash cow for the Treasury” amid rising oil prices.
The cost of crude oil has surged in recent weeks due to Iran’s disruption of tanker traffic through the Strait of Hormuz, resulting in higher fuel prices and intensifying calls for government intervention.
In last November’s Budget, Reeves extended the existing fuel duty cut—first introduced in 2022 following the Ukraine war—until August 2026, the Independent reported.
However, beginning in September, rates are expected to rise gradually over the next five years.
This timeline is now being scrutinised as petrol prices continue to climb, with critics urging the government to take action similar to that of their European counterparts, who have quickly moved to protect consumers.
Policymakers across Europe have adopted a more interventionist approach. For instance, Greece has implemented a three-month cap on profit margins for fuel and certain supermarket goods. Hungary has imposed price caps on petrol and diesel, and Germany plans to restrict petrol stations to a single daily price increase starting in April, with fines of up to €100,000 for violations. Additionally, Germany is considering a windfall tax on oil companies.
In contrast, the UK government has thus far resisted new interventions, despite rising costs that are contributing to broader inflation and straining household budgets.
Motoring groups and opposition figures argue that proceeding with a fuel duty increase in September could worsen the cost-of-living crisis, especially if global energy markets remain unstable.
Treasury officials have indicated that the policy is under review, but they have not committed to any changes. With oil prices on the rise and geopolitical tensions showing no signs of easing, the Chancellor faces a pressing dilemma: protect public finances or provide immediate relief to financially stressed drivers.
William Yarwood, media campaign manager at the TaxPayers’ Alliance told The Independent: “British drivers are being used as a cash cow for the Treasury at a time when they can least afford it.
While our European neighbours are stepping in to shield their citizens from soaring pump prices, the British government is preparing to hike fuel duty for the first time in 15 years.
The chancellor must extend the fuel duty freeze and commit to disapplying VAT from fuel duty entirely.
Howard Cox, founder of the FairFuelUK campaign said: “Dozens of countries worldwide, like France, India, and Italy, are recognising the financial sense in supporting drivers as pump prices soar uncontrollably.”
Cox added: “The chancellor and any sensible economist in this Treasury must promise to keep fuel duty frozen for the duration of this Parliament.
“But even more beneficial to the economy and small businesses, she must cut fuel duty now, and remove the immorally levied VAT on fuel, and ensure that pump pricing is fair, honest, and transparent through a PumpWatch regulatory price monitoring body with legislative teeth.”
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