Number 10 Weighing Fuel Duty Hike Review, But Only Through the Budget
Prime Minister Keir Starmer’s Downing Street is understood to be considering whether to revisit the planned September fuel duty hike. But sources close to Number 10 are being clear about one thing: if any change is coming, it will only happen at a formal Budget. For the millions of British drivers watching pump prices climb week by week, that is cold comfort.
The government finds itself in a genuinely awkward position. On one side, there is growing public anger about the cost of filling up, pressure from its own MPs, and a cost-of-living crisis that simply will not go away. On the other, the Office for Budget Responsibility has calculated that fifteen consecutive years of freezing fuel duty has cost the government around £120 billion between 2011 and October 2024. House of Commons Library Reeves cannot simply wave that figure away. The money has to come from somewhere, and the Chancellor knows it.
So for now, Downing Street is choosing the most politically cautious path available. It is watching, it is listening, and it is not committing to anything.
What is actually happening with fuel duty right now
To understand the pressure building on Number 10, you need to understand where things currently stand. Fuel duty is frozen until September 2026, at which point a 5p cut that was introduced back in March 2022 will begin to be phased out. This will mark the first increase in fuel duty since 2011. Full Fact
That original 5p cut was brought in as an emergency response to the Ukraine war energy shock, when petrol and diesel prices surged to record levels and Rishi Sunak was under enormous political pressure to act. It was presented at the time as a temporary measure, intended to last twelve months. In practice, successive governments chose to keep it in place, freezing rates through Spring Budget 2023, Spring Budget 2024, and into Labour’s Autumn Budget 2024. Fleet News
When Chancellor Rachel Reeves stood up to deliver the November 2025 Budget, she made a decision that was notable precisely because it was different to every one of those previous decisions. Rather than simply extending the freeze again, she announced the 5p cut would be wound down progressively from September 2026, with a 1p increase that month, followed by 2p in December and a further 2p in March 2027. Prism News
That staggered phasing-out is what is now causing such political turbulence. By March 2027, the average cost to fill a 55-litre car with petrol or diesel will have risen by £2.75 a tank. RAC In isolation, that might not sound dramatic. For a family already managing a tight budget, it is another squeeze they did not budget for.
The Hormuz crisis changed everything
The politics of fuel duty shifted sharply earlier this year when the Strait of Hormuz crisis sent pump prices surging. RAC data showed diesel at UK forecourts hit 185.2p per litre, up approximately 42.9p since Iran’s blockade began on 28 February 2025, while petrol climbed by 21.6p to around 154.5p per litre, its highest level in 28 months. Prism News
Suddenly the September duty hike was not a distant fiscal event. It was a political problem arriving at precisely the wrong moment. Drivers were already furious at what they were paying at the pump. The idea that the government was about to add more on top of that became genuinely difficult to defend on the doorstep.
The pressure got close enough to home that Lord Richard Walker, Starmer’s own appointed cost-of-living champion and executive chairman of Iceland supermarkets, publicly called on the government to extend or expand the temporary 5p cut, pointing to the Strait of Hormuz crisis as having pushed diesel to its highest price in over two years. Prism News Speaking on BBC Radio 4’s Today programme, he said: “I think given where we are, we do need to be thinking and talking about extending it or enlarging it.” Britannia Daily
When a Prime Minister’s own cost-of-living envoy goes on national radio to call for a rethink of government policy, it tends to focus minds in Downing Street rather quickly.
Starmer’s careful words and what they actually mean
When the Prime Minister was pressed directly at Prime Minister’s Questions, he chose his words with obvious care. He told the chamber: “There has not been a rise. Fuel duty is frozen. It is frozen until September,” while also saying the government “will keep the situation under review in the light of what is happening in Iran.” Full Fact
That phrase, “keep the situation under review,” is doing a lot of work in that sentence. Westminster journalists know it well. It means: we are aware this is a problem, we are not ruling anything out, and we are definitely not making any promises. It is the language of a government that wants to appear responsive without actually committing to anything.
What sources are now adding to that picture is the crucial qualifier: any formal change to the September plan will only be considered at a Budget. There will be no emergency announcement, no surprise reversal, no unilateral decision outside the proper fiscal process. At the Spring Statement in 2026, Reeves rejected calls from motoring groups to reverse the rises and made no further comment about whether the cut would be extended beyond August 31, 2026. Prodrivermags The Treasury’s line has remained consistent throughout: “Fuel duty is frozen until September.” Prism News
For now, that is the full extent of the reassurance on offer to drivers.
Opposition parties are not letting this go
The political opposition has spotted an opportunity and is not about to waste it. At PMQs, Conservative leader Kemi Badenoch went directly after the Prime Minister, claiming he was “hiking fuel duty for the first time in 15 years.” Full Fact It is a charge that slightly oversimplifies the timeline, but it lands with enough force that most people watching at home will find it persuasive.
The Liberal Democrats have gone further still, with Ed Davey calling for an immediate 10p cut that he argues would bring down pump prices by 12p per litre. The Road Haulage Association has taken an equally direct line, urging the government to scrap the September hike entirely. Prism News
Reform UK and Nigel Farage have also been loud on the issue, framing it as evidence that Labour is out of touch with working people who depend on their cars to get to work, school and the shops.
Industry warnings are stacking up
The pressure is not coming from politicians alone. The businesses that run Britain’s roads are becoming increasingly alarmed at what is coming down the track.
The Road Haulage Association’s managing director Richard Smith warned the planned duty reversal “will be a hammer blow for many businesses and push up the cost of living for families across the country.” Commercial Motor The Association of Fleet Professionals described the September rise as “unexpected and definitely unwelcome,” warning it will hit budgets already under considerable pressure. Commercial Motor
These are not lobby groups making noise for the sake of it. Hauliers, fleet operators and logistics companies sit at the heart of how this country moves goods and gets things done. When fuel costs rise, those costs do not get absorbed quietly. They filter through to delivery charges, retail prices and ultimately the weekly shop. The Treasury knows this. The question is whether it believes the fiscal argument outweighs the political and economic risk.
The Treasury’s problem has no easy answer
It would be unfair to suggest the government is simply ignoring the pain. The fiscal reality it is navigating is genuinely difficult. In 2024/25, fuel duties raised just under £25 billion, representing 0.8% of GDP, House of Commons Library and that revenue matters enormously against a backdrop of stretched public finances. The headline fuel duty rate has been frozen since 2011, and the cumulative cost of that freeze has weighed heavily on the government’s ability to fund public services. Office for Budget Responsibility
The government has stated it will continue to keep fuel duty rates under long-term review, including carefully considering support for motorists. UK Parliament That is not the language of a department that is deaf to the problem. It is the language of a department trying to work out how to solve it without blowing a hole in the fiscal plan.
The OBR has made clear that simply continuing to freeze or cut fuel duty is not free. Every extension costs the government money it is currently committed to spending elsewhere, and the forecasts assume those revenues will eventually recover. If Reeves were to abandon the September plan entirely, she would need to find the money from somewhere else, at a time when there is very little slack in the system.
What drivers need to know right now
The honest answer for anyone filling up in Britain today is that uncertainty remains the defining feature of this story. Pump prices are high, the September hike is still scheduled, and the government has offered no firm commitment to change course. Number 10 is clearly aware of the political damage the hike could cause, particularly if oil prices remain elevated through the summer. But it is equally clear that Reeves is not going to be bounced into an off-Budget announcement, no matter how loud the pressure gets.
The next Budget, whenever it arrives, will face enormous public expectation. Drivers, hauliers, and businesses will all be watching to see whether the Chancellor uses it to offer genuine relief at the pump, or whether the fiscal arithmetic wins out and the September plan proceeds largely as announced.
What is clear is that Number 10 has not closed the door on a rethink. It has simply decided that door will only open in one particular place, and at one particular time.
Until then, the government’s message to drivers is the same message it keeps delivering on the cost of living more broadly: we hear you, we are watching, and we ask you to wait.