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World Economy
Apr 03, 2026

UK cost‑of‑living tsar urges Starmer to prolong fuel duty cut amid Iran‑driven oil price surge

AI Summary
Labour’s cost‑of‑living champion, Richard Walker, is pressing Prime Minister Keir Starmer to extend the 5‑pence fuel duty reduction as the Iran‑related blockade of the Strait of Hormuz pushes UK diesel and petrol prices up 30% and 16% respectively, while other nations such as Australia have already deepened their own fuel tax cuts.

Richard Walker, executive chair of the Iceland supermarket chain and Labour’s appointed cost‑of‑living tsar, told BBC Radio 4’s Today programme that the government should extend the 5‑pence fuel duty cut beyond its September expiry to cushion households from soaring petrol prices.

The call comes as the Strait of Hormuz—a vital conduit for roughly one‑fifth of the world’s oil—remains blockaded after the United States and Israel launched attacks on Iran at the end of February. The disruption has triggered a sharp rise in global oil prices, intensifying pressure on the UK economy.

Under current policy, UK fuel duty is frozen until September, when a review is scheduled. By contrast, Australia recently announced a 14‑pence‑per‑litre cut to its fuel tax, highlighting the disparity with the UK’s modest 5‑pence reduction.

Walker emphasized on air: “Given where we are, we need to be thinking about extending or enlarging the existing cut.” He noted that the original 5‑pence reduction was introduced by the Conservative government in March 2022.

Chancellor Rachel Reeves had pledged in her November budget to keep the cut in place until August, followed by a gradual increase over five years. Prime Minister Keir Starmer has signalled that the planned September rise will remain “under review” in light of the ongoing conflict.

Data from the RAC shows that, since the war began, the average price of a litre of diesel at UK forecourts has jumped 30 % to 185.2 pence, while petrol has risen 16 % to 154.5 pence per litre.

Opposition parties are also weighing in: the Conservatives propose scrapping VAT on energy bills for several years, Reform UK calls for a VAT cut on fuel, and the Liberal Democrats advocate a 10‑pence fuel duty reduction.