Petrol and diesel drivers to pay '£175 extra per year' as Labour prepares to hike fuel duty 'by 7p'

Labour has continually warned that a £22billion black hole in public finances will need to be filled after being left by the previous Conservative administration, prompting fears that drivers could be targeted.

Fuel duty has been a contentious issue since it was slashed by former Chancellor Rishi Sunak in 2022 following the Russian invasion of Ukraine and the subsequent hike in fuel prices.

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The five pence per litre fuel duty freeze will expire in March, although many are now speculating that the Government could end the freeze on October 30 to claw back money.

According to a Whitehall source, officials have told Chancellor Rachel Reeves that it is "now or never" on fuel duty, the Mail reported.

They claimed that officials are advising the Chancellor that motorists would be able to afford the hike in fuel duty since prices have been dropping dramatically in recent months.

It was reported that the Chancellor was warned that "if she doesn’t act to end the freeze now she will find it much harder to do so later in the parliament".

Fuel duty rakes in around £25billion per year for the Government, with many warning that a black hole in receipts could reach £35billion when electric vehicles become more popular than petrol and diesel cars.

Paul Barker, editor of Auto Express, said a "reported 7p rise in fuel duty" would be a "major blow" to drivers who continue to struggle with the cost of living crisis.

At present, drivers are paying an average of 135.03p for unleaded and 130.01p for diesel - the lowest prices have been since the start of the year.

RAC Fuel Watch and other motoring organisations have previously forecast that prices would continue to fall, although these predictions have been altered following the hostilities in the Middle East and the looming fuel duty decision.

Barker added: "With the average car needing refuelling every eight days, this hike would increase the cost of each fill-up by nearly £4 - around £175 per year in extra fuel expenses - making it harder for drivers to keep up with their regular expenses, particularly those who rely on their cars for work or daily commuting.

"What’s especially frustrating is that this increase comes just as global fuel prices have begun to ease, raising suspicions that the Government is trying to capitalize on a brief period of lower costs to impose a hefty tax increase.

"Drivers who have already endured high fuel prices over the past few years would be unfairly burdened at a time when household budgets remain stretched."

Barker called on the Government to focus on issues that really matter to drivers, with recent polling showing that fixing potholes and reducing car crime are the most important concerns for British motorists.

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Speaking previously to GB News, an HM Treasury spokesperson said: "Following the spending audit, the Chancellor has been clear that difficult decisions lie ahead on spending, welfare and tax to fix the foundations of our economy and address the £22billion hole in the public finances left by the last Government.

"Decisions on how to do that will be taken at the Budget in the round."