UK businesses demand urgent fuel duty cut and diesel rebate scheme in upcoming Budget

Experts have warned that Labour's inaction on fuel duty could have a huge impact on millions of people across the UK by pushing up food prices.

The Iran war has sent petrol and diesel prices soaring since the conflict broke out in March, with drivers feeling the pressure at the pumps.

At present, motorists are paying an average of 174.18p per litre for petrol and 199.15p per litre for diesel - less than a penny cheaper than the all-time peak.

With the Government's Budget on the horizon, the Road Haulage Association has warned the Chancellor that the UK could face even greater issues if prices continue to have an impact.

The RHA has warned that the impact of high fuel costs will continue to push up the price of food and household essentials.

Over 85 per cent of the UK's goods are transported by road, with an HGV driver spending more than £380 on fuel every week.

Hauliers run on margins of around two per cent, while RHA research shows that 82 per cent of businesses back Government action on fuel duty in the upcoming Budget.

Richard Smith, managing director of the RHA, said: "Fuel prices continue to hammer many of the businesses that keep Britain moving.

"Piling fuel duty rises on top will push up costs for every firm that moves goods and every household that buys them."

The RHA has called on Chancellor John Healey for a 15p per litre rebate for "essential users of fuel", like HGV, coach and van drivers.

A 15p per litre rebate would allow drivers to claim £1,500 back for every 10,000 litres of fuel.

The organisation highlighted how other nations, including France, Spain and Italy, have already given commercial operators a fuel rebate.

LATEST DEVELOPMENTS

• Digital driving licence nearing nationwide rollout for millions of UK drivers - 'Significant moment'
• Parking law changes confirmed by Labour in major victory for millions of UK drivers
• DVLA announces new update today that could impact vehicle owners across Britain

It accused Britain of playing catch-up, noting that the Republic of Ireland had extended its diesel rebate scheme very recently.

The enhanced maximum rate of 12 cents (10p) per litre has been extended until December 31, 2026, and applies to vehicles over 7.5 tonnes in weight.

Ahead of the Budget, the RHA said any rebate introduced should be in addition to the extension of the existing fuel duty freeze.

The current 5p per litre fuel duty freeze is set to expire at the end of the year, at which point, it will rise by 3p. It will return to its pre-Russian invasion level in March 2027.

Mr Smith emphasised the need for Chancellor Healey's support, adding that these measures would be the "cheapest and quickest inflation controls".

"Our message is clear: Bring in a fuel rebate for the HGV, coach and van operators this country depends on, and scrap the planned fuel duty rises," he said.

GB News has contacted HM Treasury for a comment.