Ministers are pressing John Healey to scrap plans to hike fuel duty by up to 7p a litre, amid fears about the impact on the economy and cost of living.
Senior figures have told the Daily Mail that the Government should not press ahead with the plan to phase in the huge hike from January at a time of soaring fuel prices.
The RAC said yesterday that diesel prices were at an all-time high of £1.99 a litre as the Middle East war hits supplies again.
Ministers fear the price could reach £3 if Donald Trump halts diesel exports to the UK as part of efforts to cut prices in the US.
One minister said the Government could not go ahead with plans to scrap a ‘temporary’ 5p-a-litre cut in fuel duty introduced by the Tories in 2022.
The source urged the Chancellor, pictured, to postpone the increase indefinitely.
‘We just cannot let this rise go ahead and credibly claim we are a cost-of-living government – it is unthinkable,’ they said.
‘John [Healey] has got a lot on his plate but he is going to have to find the money.’ Another Cabinet source said: ‘The situation with fuel prices is very worrying.
John Healey delivers a speech during the annual Labour Party Conference on September 28
‘The whole country runs on diesel – it is not just people going to work, it is everything on the supermarket shelves.
‘I think everyone, including John, understands that we can’t be seen to be adding to the problem right now.’
Under current plans, fuel duty will rise by 3p per litre on January 1, with another 2p rise on March 1.
The Treasury is also scheduled to end the 16-year freeze on fuel duty next year, adding a further 1p in April.
VAT will add another 1.2p per litre. The combined 7.2p increase would add almost £4 to the cost of filling up a family car with petrol.
Treasury sources told the Mail that ‘no decision’ has been taken on the fuel duty increases.
But retaining the 5p duty cut alone would cost the Treasury £2.4billion a year at a time when Mr Healey is struggling to balance the books.
