The Government could reconsider its planned increase in fuel duty after rising petrol prices linked to the conflict in Iran, Prime Minister Keir Starmer has suggested.
Speaking during Prime Minister’s Questions on Wednesday, Starmer said the Government would keep the policy “under review” as global tensions continue to affect energy markets.
Petrol prices have recently climbed at their fastest rate since Russia’s invasion of Ukraine in 2022, driven in part by instability in the Middle East. The surge has renewed criticism of Labour’s intention to remove the temporary 5p cut to fuel duty later this year.
The tax reduction was originally introduced following the energy price shock triggered by the war in Ukraine. Although it had been due to end in April, Labour extended the measure until September 2026 in last year’s Budget.
Conservative leader Kemi Badenoch challenged the Prime Minister in the Commons, arguing that increasing fuel duty would worsen pressure on household finances.
She said that Starmer had previously described the cost of living as his top priority and asked how raising fuel duty would help families already struggling with rising prices.
Starmer replied that fuel duty would remain frozen until September and stressed that the Government was monitoring developments in Iran closely.
“Fuel duty is frozen, it’s going to remain frozen until September and we will keep the situation under review in light of what is happening in Iran,” he told MPs.
He also insisted that the Government was not currently raising petrol prices and said ministers were focused on responding to the economic effects of the conflict.
However, Chancellor Rachel Reeves earlier signalled reluctance to abandon the planned change. Speaking to the Treasury Select Committee, she argued that government subsidies were not the best way to address fuel costs.
Reeves said she preferred to see stronger competition and clearer pricing information across petrol stations, allowing motorists to find cheaper fuel more easily.
“I’m very loath to spend government money on something that the market should be doing itself,” she told the committee.
She added that greater transparency in fuel pricing would be more effective than subsidies, which she said often benefit retailers rather than consumers.
The Government has not confirmed whether the scheduled end of the 5p duty reduction in September will go ahead, but ministers say the situation remains under consideration as fuel prices continue to rise.
