UPDATE 2-UK extends fuel duty cut to ease Iran war inflation squeeze

Britain will extend a cut ‌in motor ​fuel duty until the end of the year, the government said on Wednesday, as it seeks to ease cost-of-living pressures that have risen due ‌the Middle East conflict. The cut of 5 pence per litre had been due to expire in September but the government said it would extend it after the Iran war caused global oil prices to leap.

Britain will extend a cut ‌in motor ​fuel duty until the end of the year, the government said on Wednesday, as it seeks to ease cost-of-living pressures that have risen due ‌the Middle East conflict.

The cut of 5 pence per litre had been due to expire in September but the government said it would extend it after the Iran war caused global oil prices to leap. "I ‌know many are feeling the pressure of energy and fuel costs, and are worried about how ‌the conflict in Iran will affect their finances," Prime Minister Keir Starmer said in the statement.

"That’s why this government is stepping in to keep fuel costs down for millions of drivers." Alongside the extension, the government announced a new 12-month holiday for road ⁠tax paid ​by hauliers which it ⁠said would save them up to £912 ($1,222.08) per vehicle. It also said it was cutting duty on red diesel for off-road use ⁠by over a third per litre to 6.48 pence, its lowest rate in over 20 years.

The 5p fuel ​duty cut was introduced in 2022 and has now been extended five times under successive governments. ⁠It was supposed to last 12 months which would have cost £2.4 billion, according to government estimates released in January. Fuel duty raised £24 ⁠billion ​for the public coffers in the last financial year.

It was not immediately clear how much the latest extension would cost. Britain has also kept the level of fuel duty unchanged since 2011 as governments ⁠sought to protect drivers from higher costs.

The new measures come days after the International Monetary Fund said any ⁠energy subsidies should ⁠be targeted and temporary, and urged the government to consider broadening the base of value-added tax and reforming property tax over the longer term. ($1 = 0.7463 pounds)