CNBC's UK Exchange newsletter: Pain at the pump stokes trouble at the top
By Ian King
Published on March 18, 2026.
The cost of filling a car is a key issue for the British government, particularly as petrol costs increase significantly due to the Iran conflict. The UK government has been reluctant to overturn a temporary freeze in fuel duty introduced on a temporary basis 15 years ago, which has cost the Treasury tens of billions of pounds in foregone taxes and put pressure on public finances. The Bank of England had predicted that Consumer Prices Inflation (CPI) would fall to 2.1% in Q2 this year, but the Middle East conflict has exacerbated this situation. Prime Minister Keir Starmer's government has already announced a £52.4 million ($70 million) package to support vulnerable households hit by a surge in the price of heating oil, which is not capped by Ofgem. This comes after a decade of government unrest, when former Prime Minister Tony Blair's government was rocked by fuel price protests due to tax increases due to climate change measures.
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