The chancellor is expected to ease the pain of British motorists in his budget this week. Fuel duty is due to rise by 3p a litre in August but George Osborne has been under pressure from cabinet colleagues and Tory MPs to delay the increase.
MPs, particularly those in rural areas, have been lobbied by constituents who say they are struggling to afford the cost of filling up the family car.
Petrol prices have risen by 3.5p a litre over the past month to reach a record high. Motorists are paying on average 139p a litre for unleaded petrol and 146p for diesel.
David Cameron acknowledged during a visit to America that high fuel prices are hitting consumer confidence. The prime minister told US students that the cost of filling up in Britain would make American motorists “faint”.
Motoring groups say increasing oil prices and higher Vat have produced £4 billion for the Treasury since the coalition came to power.
Advertisement
The Retail Motor Industry, which represents 6,000 independent fuel retailers, said it is possible that petrol could hit 142p a litre and diesel 150p by Easter.
In his autumn statement last November, Osborne postponed a fuel duty rise of 3p from January to August.
He has previously argued that he has already committed billions of pounds to helping motorists, including a cut in fuel duty in last year’s budget. The chancellor also scrapped the so-called fuel duty escalator, which raised duty by 1p above inflation every year.