The Liberal Democrats are demanding that the Government cut fuel duty to protect motorists from paying near-record prices for petrol and diesel.
Experts have warned that the ongoing conflict in the Middle East between the United States and Iran has caused the global cost of oil to soar, which is being passed on at pumps across the UK.
Fresh data from RAC Fuel Watch suggests that diesel is set to hit its highest price ever, at around £2, surpassing the previous peak seen after the Russian invasion of Ukraine.
Drivers around the country are currently paying an average of 172.02p for petrol, while diesel stands at around 195.32p per litre.
Both petrol and diesel prices are now more than 37 per cent higher than they were at the start of the US-Iran war.
Prices are also at their highest rate since August 2022, as the RAC’s head of policy warned that diesel prices would likely “reach a new all-time high” this week.
In response to these soaring costs, Sir Ed Davey has called on the Government to slash fuel duty by 10p a litre until Christmas to help struggling motorists.
The leader of the Liberal Democrats has also called on Chancellor John Healey to cancel a planned hike in fuel duty set to be imposed from January 2027.
Labour is being urged to cut fuel duty as petrol and diesel prices reach near-record prices
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Former Prime Minister Sir Keir Starmer announced earlier this year that the 5p fuel duty freeze would be extended and instead would be gradually phased out in September, December and March 2027.
This plan was also amended in response to high prices, although a planned 3p increase will go ahead in January next year.
Speaking on BBC’s Sunday with Laura Kuenssberg, Sir Ed Davey called for a 10p cut, arguing that it would cause fuel to drop by 12p.
He added: “Petrol and diesel prices are higher than they’ve been for a long time because of Trump’s mad war with Iran, and people need help now.”
Sir Ed Davey will deliver his headline speech at the Lib Dem Party Conference on Tuesday
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Sir Ed Davey said a 10p per litre cut in fuel duty would cost around £2billion, and would be a temporary three-month package.
“If you look at the extra money the Government will get through the energy profits levy, from gas taxes, from VAT and fuel duty, it’s self-funding,” the Lib Dem leader added.
Sir Davey, who represents Kingston and Surbiton in Parliament, stated that he would reveal the party’s “credible growth plan” to deliver more tax cuts in his conference speech on Tuesday.
This will include plans to slash the bus fare cap from £3 to £1 and cut the cost of rail fares by 10 per cent.
Petrol and diesel prices around the UK continue to rise | PA
Chancellor John Healey will deliver his first Budget on Wednesday, October 28, and is expected to “move power and money out of Westminster, and into every postcode around Britain”.
The Budget, which will also be the first under Prime Minister Andy Burnham, will be “built on fiscal discipline” to provide stability to businesses and families.
Fuel duty could become a bigger topic in the Budget than previously anticipated, especially if prices continue to rise and break records.
While diesel is likely days away from hitting £2 a litre, it may take longer for petrol to reach its previous peak of £1.91 per litre.