Chancellor John Healey is told to scrap fuel duty rise as prices soar

By DAVID CHURCHILL, CHIEF POLITICAL CORRESPONDENT Published: 23:21, 3 August 2026 | Updated: 23:21, 3 August 2026 John Healey was facing growing calls on Monday to abandon a planned fuel duty raid if Labour were to be seen as serious about tackling the cost of living. In a private letter to the Chancellor, industry chiefs warned that pump prices were on the rise again and could remain high for months as the Iran war drags on. Yesterday pump prices hit a record high since the start of that conflict, with petrol 160.85p a litre and diesel at 180.34p. A study by the RAC found motorists had paid an extra £500million at the pumps since the summer getaway started on July 17, compared with prices before the war. But despite this, fuel duty, currently 53p a litre is set to be raised by 3p a litre on New Year's Day and a further 2p on March 1, netting billions more for the Treasury. In the letter to Mr Healey, seen by the Mail, boss of the Petrol Retailers Association Gordon Balmer urged the Chancellor to go further by using his first Budget this Autumn to freeze fuel duty beyond January to help motorists make ends meet. 'January and February are precisely when household budgets are typically at their most strained,' the letter states.  'We welcome your focus on making life more affordable. That is why I am today asking you to abandon your plans to end the fuel duty cut at the start of 2027.' John Healey has faced growing calls to abandon a planned fuel duty raid if Labour were to be seen as serious about tackling the cost of living Mr Healey and Prime Minister Andy Burnham (pictured) have slashed VAT on household energy bills Since the conflict began on February 28, drivers have paid an extra £5.5billion at the pumps, with the Treasury raking in nearly £1billion more in VAT as result. A full tank is £15 more expensive than when the conflict started. Mr Healey and Prime Minister Andy Burnham have slashed VAT on household energy bills. But critics point out this has only saved families on average 86p a week. A 5p-a-litre cut in the levy introduced by the Tories in 2022 is set to expire on January 1. Its introduction meant fuel duty has not risen in 15 years. Treasury sources said a decision would not be made until Mr Healey's Budget, on October 28.