Starmer’s cost of living tsar calls for fuel duty to be extended in light of Iran war
Sir Keir Starmer’s cost of living campaigner has called on the government to consider “extending” or “enlarging” the 5p fuel tax cut as the Middle East crisis deepens.
Oil prices, which have a significant impact on fuel costs, have risen in response to Iran’s crackdown on tankers passing through the Strait of Hormuz, driving up pump prices and increasing pressure on the government to abandon a fuel tax increase planned for September.
Iceland boss Richard Walker has joined growing calls for ministers to abandon fuel tax hikes.
“Given the situation we’re in, I think we need to think and talk about expanding or enlarging it,” Lord Walker told BBC Radio 4’s Today programme.
“Interestingly, I read that the Australian government recently cut fuel duty by 14p per litre. So that cut is 5p,” he added.
Chancellor Rachel Reeves announced in the November 2025 budget that the 5p per liter cut in fuel duty introduced by the Conservative government in March 2022 would only be extended until the end of August, with rates gradually returning to March 2022 levels over the next five years. But other countries, including Australia, have already taken action to reduce the impact of price increases on drivers.
Lord Walker was asked about Tory Lord Simon Wolfson’s comment that the Treasury should not be profiting from the Iran war and could help businesses and consumers by adjusting fuel duty to help ease immediate cost pressures.
Chief executive Lord Wolfson said the government would be charging higher fuel duty due to spiked prices and could “balance the books” by reducing it to ensure the levy remains the same.
Labour’s Lord Walker said: “Lord Wolfson is a wonderful man and very intelligent and he may be right about that.”
Liberal Democrat leader Sir Ed Davey also called for a 10p cut in fuel duty to help motorists cope with rising petrol and diesel costs.
“Families are paying more at the pump for a war they did not start and do not support,” he said.
He said action on petrol and diesel prices, cutting fuel duty “now by 10p per litre, not 1p, not 5p”, was “particularly important today, as people head out to meet family and friends for the Easter weekend – 21 million journeys – it is the busiest weekend on British roads in years.”
Car services company RAC said the latest average price of a liter of diesel in Britain was 185.2 pence on February 28, up 30 per cent since the start of the war.
Average petrol prices increased by 16 percent over the same period, reaching 154.5 pence per liter.
Prime Minister Sir Keir had previously promised that a planned increase in fuel duty from September would be kept “under review in light of what is happening in Iran”, and the Government has stepped up efforts to help motorists find the cheapest fuel in their area through a price comparison website.
But opposition parties have called for faster action and laid out their own plans to cut the price of petrol and home energy bills as households face the prospect of a rise in energy bills later this year.
The Conservatives have called for the elimination of VAT on energy bills for the next three years, while Reform UK has pledged to reduce VAT on fuel and remove green taxes on energy bills, and the Liberal Democrats have said there should be a 10p cut in fuel duty.
Meanwhile, in the face of growing political pressure to increase North Sea drilling due to concerns about energy security, the Times reports that Energy Secretary Ed Miliband is expected to approve the Jackdaw gas field off the coast of Scotland, despite his opposition to the Rosebank field.
