By GREG HEFFER, POLITICAL CORRESPONDENT
Rachel Reeves today defended her plans to increase fuel duty by 5p from later this year - despite pump prices rocketing amid the Iran crisis.
Oil prices have soared since the US and Israel began strikes against Tehran and exceeded 100 dollars per barrel on Monday.
Although prices fell back below 90 dollars as Donald Trump suggested the conflict was nearing a conclusion, there has already been a knock-on effect for drivers.
The average cost of a litre of unleaded petrol is up by 3.5p since last week, while diesel rose 6.9p.
This marked the biggest surge since 2022, when Russia's full-scale invasion of Ukraine sparked an energy crisis.
The Chancellor on Tuesday admitted pump prices were 'very volatile at the moment' but resisted growing calls for her to U-turn on plans to hike fuel duty in September.
Fuel duty has been frozen since 2011, and was cut by 5p in 2022 in response to Russia's assault on Ukraine.
At her Budget last year, Ms Reeves said the 5p cut would be unwound between September this year and March 2027.
Reform UK leader Nigel Farage offered drivers discounted fuel in Derbyshire as he outlined his party's pledge to reverse the fuel duty hike
Mr Farage announced the policy at a forecourt in Newhaven where the price board was covered in Reform branding, such as 'Reform Refuel' and '25p off with Farage'.
It came as Reform UK leader Nigel Farage offered drivers discounted fuel in Derbyshire as he outlined his party's pledge to reverse the fuel duty hike.
Mr Farage announced the policy at a forecourt in Newhaven where the price board was covered in Reform branding, such as 'Reform Refuel' and '25p off with Farage'.
This put a litre of diesel at a subsidised price of £1.43 and a litre of unleaded petrol at £1.21.
Mr Farage and Robert Jenrick, Reform's Treasury spokesman, were seen helping drivers to fill up.
Mr Jenrick, who recently defected from the Tories, said a Reform government would save £13billion a year by cutting spending on Net Zero initiatives.
The party would scrap the scheme providing grants to homeowners to install heat pumps, cut investment in carbon capture technologies, and axe grants for new electric vehicles, Mr Jenrick said.
He added a Reform government's first budget would 'bring down the cost of fuel by taking at least 5p off the cost of fuel every time you fill up'.
Mr Farage also vowed to abolish the windfall tax on North Sea oil and gas, something the Labour Government has already signalled it will do.
Chancellor Rachel Reeves defended her plans to increase fuel duty by 5p from later this year - despite pump prices rocketing amid the Iran crisis
Later on Tuesday, as she answered questions in the House of Commons, Ms Reeves defended her plans to hike fuel duty from September.
She told MPs: 'The price today of petrol is 8 pence per litre lower than if I had a followed the plans that were left to me by the previous Conservative government.
'And from April they will be 11 pence per litre lower. Of course, we keep these things, under review.
'But if you look at petrol prices, oil prices today, they are 24 per cent lower than they were yesterday.
'So things are very volatile at the moment, which is why... the most important thing we can do to address the cost of living challenges people face is to de-escalate the conflict in the Middle East.'
The Chancellor added that she would be meeting with petrol retailers later this week to 'raise concerns and to get prices down at the pumps for all our constituents'.
'The Government's cheaper fuel finder scheme is now online, and it shows petrol prices at forecourts across the country,' she said.
'Yesterday, some petrol retailers charged almost 180p per litre, while others were charging less than 130p per litre. This Government will not tolerate price gouging.'