Rachel Reeves urged to follow European countries and protect consumers amid spiralling fuel prices

Rachel Reeves is under increasing pressure to follow European countries and take action to protect consumers at a time when fuel prices are soaring; campaigners accuse ministers of treating British motorists as “the Treasury’s cash cow”.

Oil prices, which have a significant impact on the cost of wholesale fuel, have risen in response to Iran’s crackdown on tankers passing through the Strait of Hormuz, leading to an increase in pump prices and increasing pressure on the government to abandon a fuel tax increase planned for September.

The Chancellor announced in his November 2025 budget that the fuel duty cut introduced by the Conservative government in March 2022 after the outbreak of the Ukraine war would be extended until the end of August 2026, with rates gradually returning to previous levels over the next five years.

But it faces growing calls to abandon a fuel tax increase planned for September due to a rise in pump prices and instead follow European allies who have taken significant steps to keep prices low as the war continues.

Earlier this month, Greece announced a three-month cap on profit margins on fuel and some supermarket products, while Hungary capped gasoline at 595 forints (€1.52) to 615 forints (€1.57) per liter.

Germany, which is also considering imposing an unexpected tax on oil companies, will limit gas stations to one price increase per day at 12:00 starting from April. Companies found to have violated the rules could face fines of up to €100,000.

William Yarwood, media campaign manager at TaxPayers’ Alliance, said: Independent: “British motorists are being used as cash cows for the Treasury at a time when their funds are at their lowest.

“As our European neighbors step in to protect their citizens from rising pump prices, the British government is preparing to increase fuel duty for the first time in 15 years.

“The Chancellor must extend the fuel duty freeze and commit to completely eliminating VAT on fuel duty.”

Howard Cox, founder of the FairFuelUK campaign, also pressed the government to intervene, saying: “Dozens of countries around the world, including France, India and Italy, recognize it makes financial sense to support drivers as pump prices rise uncontrollably.”

He accused the Government of being “committed to supporting the 5p increase in the Autumn Budget” and added: “The Chancellor and any sensible economist in this Treasury must promise to freeze fuel duty for the duration of this Parliament.

“But to be even more beneficial to the economy and small businesses, it should now cut fuel duty, abolish the immoral VAT on fuel and ensure pump pricing is fair, honest and transparent through a PumpWatch regulatory price monitoring body with legislative teeth.”

Meanwhile, left-wing Labor MP Clive Lewis, a vocal critic of the government, warned that planned fuel tax increases were “designed for a different moment, not a crisis where pump prices rise due to war”.

he said Independent: “Going up the escalator now will project an air of indifference towards drivers, farmers and small businesses who have no part in creating this situation.

“The burden always falls on the shoulders of those with the fewest options: rural communities, those who have to drive to work, truckers working on thin margins. These are not the people who benefit from this crisis.”

This comes as diesel prices hit their highest level since December 2022 on Monday, reaching 181.2 pence per litre; There has been a 27 percent increase since the beginning of the Middle East conflict. Average petrol prices increased by 14 percent from 132.8 pence to 152.0 pence per liter in the same period.

Meanwhile, the price gap between diesel and petrol in the UK on Sunday reached its highest level since at least 2003, prompting RAC Foundation director Steve Gooding to warn that “white truck drivers are losing cash just to stay on the road”.

Latest data from the RAC showed the average price of diesel in the UK rose to 179.9p on Sunday, 28.5p more than petrol; This disparity arises because UK oil refineries are geared towards producing petrol rather than diesel, meaning the country’s diesel supply is more dependent on imports.

Latest DVLA figures show 16.2 million diesel vehicles were licensed in the UK as of the end of September last year. This included the vast majority of light goods vehicles such as pickup trucks.

Mr Gooding argued that “diesel is the lifeblood of millions of small businesses”, adding: “Whether you drive or not, rising diesel prices will take money out of your pocket, either at the pump or in bills you pay, from calling the plumber to getting home deliveries.”

Meanwhile, AA chief executive Edmund King said: “The extra increase in diesel prices is disproportionately affecting businesses, deliveries, the service sector and the self-employed.

“The government should be concerned about very high diesel prices because it is these costs that fuel inflation.

“The government may consider what to do with fuel duty in September but frankly that is five months away and it could be argued that the industry needs help now.

“With higher pump prices the government makes more from VAT, so there is some ‘free’ money in the system that can be used to help drivers.”

Sir Keir Starmer will meet bosses of energy, shipping and banking firms on Monday and talks are expected to focus on Iran’s ongoing blockade of the Strait of Hormuz.

Downing Street said the aim of the meeting, which will include representatives from energy firms Shell and BP, shipping giant Maersk, marine insurance specialist Lloyd’s of London and banks HSBC and Goldman Sachs, was to hear directly from businesses and discuss how the government and private sector could work together to respond to the conflict.

At the meeting, up-to-date information on the situation in the region will also be heard from the British naval operations commander, Major General Richard Cantrill.

Sir Keir said the No 10 summit was expected to be followed by a Cobra meeting on Tuesday where senior ministers will discuss the ongoing economic hit caused by the war.

The meeting came after Mr. Trump said he might “take the oil from Iran” or consider taking control of Kharg Island, the country’s main oil export hub.