Rachel Reeves is being urged to maintain the freeze on fuel duty in tomorrow's spending review, as experts warn petrol and diesel drivers could see fuel prices soar.
While the spending review tomorrow will not include any new tax measures, the announcement could include hints at what new plans could be rolled out in the near future, one campaigner has claimed.
One of the potential measures that could be included in the spending review is the future of fuel duty, which is currently frozen at five pence per litre below the standard 57.95p level.
This was first introduced in 2022 to help shield motorists from volatile fuel prices in the aftermath of the Russian invasion of Ukraine, as well as global instability.
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Chancellor Rachel Reeves will unveil the Government's spending review tomorrow
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While the lower rate has continually been frozen by Conservative and Labour Governments, campaign group FairFuelUK is warning that a change could be imminent.
Citing Whitehall sources, the group has warned that the Autumn Budget towards the end of the year could lead to a "10p increase" in fuel duty rates.
Howard Cox, founder of FairFuelUK, said this would be a reversal of the original 5p cut, plus an additional 5p per litre tax that would "impede economic growth".
If the 10p fuel duty hike is to be introduced, filling up an average petrol family car would cost an extra £6.60, while lorry drivers could face additional costs of an estimated £70.
The 5p fuel duty cut was introduced after Russia invaded Ukraine, forcing petrol and diesel prices up
PACox argued: "No other tax has such a profound impact on economic growth, inflation, employment, and business investment as the substantial tax on filling up at the pumps.
"In your spending review speech, please have the courage to state that fuel duty will be frozen for the duration of this Parliament and that FairFuelUK’s PumpWatch is fully operational to prevent opportunistic profiteering at the pumps.
"Rachel Reeves, you must understand that these policies are more than logical to ensure you achieve anywhere near the much-promised economic growth you have regularly called for."
In the 2024 Autumn Budget, the Chancellor unveiled plans to freeze the rate of fuel duty and extend the temporary 5p per litre cut for a further year.
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Despite the £3billion cost to the Government, Labour estimated that the support for "hard-working families and businesses" will help the average car driver save £59.
The Government said it would freeze fuel duty rates, meaning the 5p cut in fuel duty would now expire on March 22, 2026.
Chancellor Rachel Reeves also scrapped the planned increase in line with inflation, which would have been introduced in 2025-26.
At present, RAC Fuel Watch data shows that petrol and diesel prices should continue to fall in the near future, with unleaded costing 132.13p, while diesel motorists are paying 138.26p.
Cox, who founded FairFuelUK in 2010, said any increase to petrol or diesel prices could hammer drivers, businesses and key industries, which would have a further knock-on effect for the UK economy.
He notes that the average diesel fuel tax across Europe is a significant 15p lower than the rate seen in the UK.
The campaigner added that Reeves would need to "pull a financial rabbit out of the hat to avert punitive tax rises", adding that the Labour MP for Leeds West and Pudsey may have to impose "heavy burdens" on working people.
Cox added: "This is an ideal opportunity to give certainty to businesses and the UK's 37 million drivers. FairFuelUK calls on Rachel Reeves to announce that fuel duty is frozen for the lifetime of this Parliament."
GB News has approached HM Treasury for a comment.
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