Drivers to be hit by household budget-busting £2billion cost at the pumps thanks to Iran war, piling pressure on Chancellor Rachel Reeves to scrap her planned fuel tax raid

Published: 15:42, 28 April 2026 | Updated: 15:44, 28 April 2026 Drivers will be hit by a household budget-busting £2billion cost at the pumps thanks to the Iran war. Analysis has found the extra amount motorists have shelled out since the conflict sent forecourt prices rocketing will surge past the eye-watering milestone by tomorrow night. And there is no respite in sight, with pump prices set to remain high for months. It means Chancellor Rachel Reeves has netted an unexpected bumper VAT windfall of over £300million in just two months since the conflict started, piling pressure on her to use this to scrap her planned fuel tax raid to help out hard-pressed households. Global oil prices climbed above $110 for the first time in three weeks today, with the cost of a barrel of Brent crude hitting $112.70 as the Strait of Hormuz remains closed, which has squeezed supplies and sent pump prices soaring. It means forecourt prices could start climbing again in the coming weeks after average petrol and diesel prices briefly fell by 1p a litre and 2.5p respectively in recent days. The cost of filling the average 55-litre tank in a family car with petrol is still over £13 more expensive and £26 dearer with diesel compared to prices on 28 February, when the conflict started. The RAC Foundation study, which looked at daily consumption data and price fluctuations between 28 February and yesterday, found higher pump prices will have collectively cost drivers £2billion by tomorrow evening after hitting £1.92billion last night. Chancellor Rachel Reeves has netted an unexpected bumper VAT windfall of over £300million in just two months since the conflict started The cost of filling the average 55-litre tank in a family car with petrol is still over £13 more expensive and £26 dearer with diesel compared to prices on 28 February, when the conflict started, putting pressure on household budgets  AA President Edmund King said pressing ahead with plans to hike fuel taxes would not be a 'smart move'  Diesel drivers have been hardest hit, accounting for nearly £1.5billion of this. In turn, Ms Reeves has netted £330million extra in VAT receipts because higher prices mean the 20 per cent levy accounts for a bigger slice towards Treasury coffers. Critics said she should use it to delay her planned fuel duty hike, which will kick-in on September 1 and add another £3 to the cost of an average fill-up. The policy reverses a 5p a litre cut in the levy, currently 52.95p a litre, introduced by the Tories in 2022 to help out hard-pressed drivers amid rocketing pump prices sparked by Russia’s invasion of Ukraine. Ms Reeves and Sir Keir Starmer have vowed to press ahead with the hike despite most other countries cutting fuel taxes to help out drivers rather than raise them. AA President Edmund King said: ‘UK drivers have been hit three times in the past six years by pump-price shocks: first with post-Covid disruption, then the Ukraine war and now the conflict in the Middle East. ‘The impact on personal and family budgets, together with potential consumer spending being siphoned into fuel, has been devastating. ‘At the very least, the 5p cut in fuel duty needs to stay in place until motoring consumers have had a chance to get their finances back on track. ‘Scrapping it for winter when running a car is at its most expensive is not a smart move.’ Steve Gooding, director of the RAC Foundation, said: ‘Drivers have been paying a big price at the pumps for the war in the Persian Gulf. ‘Worryingly, it seems there is no immediate end in sight and with the cost of Brent crude oil still well over $100 per barrel no near-term prospect of a sizeable drop in the litre-price of forecourt fuel. ‘The question for the Chancellor must be not just whether it is tenable to stick with her planned hike in fuel duty in four months’ time but whether a more dramatic change of plan is warranted to ease the pain.’ Average diesel forecourt prices were 189p a litre today while petrol was 157.13p, slightly down from the peak of 191.54p and 158.31p on April 15 respectively. On February 28 they were 142.38p and 132.83p respectively. A Treasury spokesman said: ‘Motorists are paying more at the pumps because of the war in Iran. ‘This is not our war and that is why we did not join it. We are determined to keep costs down for motorists. 'That’s why we have extended the 5p fuel duty cut and urge for de-escalation.’ No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. 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