Petrol and diesel drivers to see prices soar as Chancellor has 'no option but to put fuel duty back up'
Experts have warned drivers that fuel duty rates could rise in the October Budget
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The RAC has issued a dire warning to motorists across the UK as they could face an enormous hike to their petrol and diesel prices following the October Budget.
Fuel prices recently fell to their lowest level since the start of the year, with drivers paying an average of 142.17p per litre for petrol and 147.02p for diesel.
However, experts are now warning that these prices could soon rise dramatically as an increasing number of people believe Labour will hike the rate of fuel duty in the October 30 Budget.
The previous Conservative originally slashed the rate of fuel duty in March 2022 in response to the Russian invasion of Ukraine which saw petrol and diesel prices spiral.
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As Chancellor, Rishi Sunak announced the cut to fuel duty in 2022
Commons TVThe fuel duty cut of five pence per litre was estimated to save the average driver around £100 a year at a cost of £10billion to the Government. The freeze was extended in 2023 and again this March.
This was despite the Office for Budget Responsibility (OBR) estimating that fuel duty rates would have to increase by around 23p per litre to address fiscal spending issues between 2022 and 2024.
Now, the RAC's head of policy is warning that Chancellor Rachel Reeves will "defrost" fuel duty in the Autumn Budget and force prices higher for already hard-pressed motorists.
Simon Williams said: "We've reached the conclusion the Chancellor has no option but to put fuel duty back up to 58p a litre in October's Budget.
"She knows the 5p discount is losing the Treasury £2billion a year. She also knows drivers were overcharged by a staggering £1.6billion last year according to the Competition and Markets Authority’s recent report."
Prime Minister Keir Starmer said in a briefing yesterday that the Budget would be "painful" because of a black hole in finances left by the previous Government.
Because of this, the Government will be forced to make several major changes, with experts suggesting that tax rises will have to be made to address funding issues.
Speaking earlier this year to GB News Political Editor Christopher Hope, Keir Starmer confirmed that fuel duty would be a "Budget-by-Budget" issue and that the track record of Labour reflected support for the freeze to continue.
Williams added that the RAC would normally be against any increases to fuel duty, but highlighted how the the cut to the rate has not led to meaningful discounts at the pumps for a long time.
A recent report from the RAC uncovered that major retailers and supermarkets were overcharging motorists for their fuel, suggesting that petrol and diesel prices needed to be cut by an average of 6p per litre.
A fuel price checker has also been backed by experts as it would stimulate competition and bring down prices for motorists, as has already been done in Northern Ireland.
The Consumer Council's fuel price checker shows that fuel stations in Omagh are charging just 130.8p per litre for petrol and 135.3p for diesel - more than 10p cheaper per litre than the UK average.
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Rachel Reeves will deliver the Budget on October 30
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The expert added: "If prices don’t fall dramatically in the next week or so, we believe the Government and the CMA should get all the biggest retailers together to demand an explanation."