Drivers forced to shell out extra £7.5 billion at the pumps - netting Treasury £1.3 billion VAT windfall - thanks to Iran war, study finds, as petrol and diesel prices spiral again to four-year high

Drivers have been forced to shell out an extra £7.5 billion at the pumps because of the Iran war, piling pressure on Labour to scrap its planned Fuel Duty raid.A study by the RAC Foundation found the conflict has collectively cost motorists the staggering sum since 28 February, when pump prices rocketed after the US bombed Iran and Tehran responded by blockading the Strait of Hormuz.Meanwhile, the Treasury has netted a £1.3 billion VAT windfall thanks to higher prices.This is because the 20 per cent levy accounts for a bigger slice towards Treasury coffers when pump prices are higher.It sparked fresh calls today for Labour to use the first Budget of Andy Burnham’s premiership next month to scrap its planned 3p a litre Fuel Duty hike, set to kick in from 1 January.Motorists face a hammering at the pumps for many more months, with no end in sight to the war.Petrol and diesel prices hit a post-war record and four year high today after the conflict flared up last week and global oil prices surged past $100 a barrel again. Drivers have been forced to shell out an extra £7.5 billion at the pumps because of the Iran war, according to a study by the RAC Foundation Tory shadow transport minister Greg Smith said pressing ahead with a Fuel Duty hike would be a 'slap in the face to motorists from Whitehall' Richard Tice, deputy leader of Reform UK, accused Labour of taking drivers 'for a ride' amid a planned Fuel Duty hike Tory shadow transport minister Greg Smith said: ‘Prices at the pumps are eye-watering and the Government needs to stop fanning the flames with Fuel Duty rises.‘Higher prices means higher VAT receipts for the Chancellor John Healey - so to raise Fuel Duty on top is a straightforward slap in the face to motorists from Whitehall.’Richard Tice, deputy leader of Reform UK, added: ‘Drivers are literally being taken for a ride by Labour.‘Labour should scrap its planned 3p Fuel Duty hike immediately. People need tax cuts, not another hit to their wallets.’Steve Gooding, director of the RAC Foundation, said: ‘Ending the war in the Gulf is out of the Government's hands, but easing the financial pain of sky-high fuel prices being suffered by private motorists and the countless businesses that rely on diesel-powered vehicles is in the gift of the Chancellor as he decides what to do about Fuel Duty in his upcoming budget.’Average petrol prices climbed again today to a post-war record of 170.54p a litre, according to the RAC, while diesel hit 192.86p. This is the highest for both fuels since August 2022 and July 2022 respectively.Before the conflict erupted, they were 132.83p a litre and 142.38p respectively.It means the cost of filling up the average 55-litre tank in a family car with petrol is now £93 and £106 with diesel. Pre-war, a fill-up was £73 and £78 respectively.The RAC Foundation study found diesel drivers - which includes vans and lorries as well as cars - have been hit the hardest.Of the extra £7.5 billion shelled out at the pumps, it has cost diesel drivers £5.4 billion and they account for £894 million of the Treasury’s £1.3 billion VAT windfall.Those calling for Fuel Duty to be frozen beyond January 1 also point out that the extra cost to haulage firms - which mostly use diesel - is often passed on, leading to higher prices on shop shelves and pushing up inflation. Chancellor John Healey was under growing pressure today to abandon a planned Fuel Duty hike as pump prices hit a four-year high Last week, US President Donald Trump tried to claim soaring prices were due to the war in Ukraine rather than the conflict he started with Iran Average petrol prices climbed again today to a post-war record of 170.54p a litre while diesel hit 192.86p, the highest for both fuels since summer 2022 At present, Fuel Duty is set to be hiked by 3p a litre on New Year's Day and a further 2p on March 1, netting billions of pounds more for the Treasury as it scrambles for cash to pay for a series of unfunded commitments made by Mr Burnham during his first weeks in Downing Street.The RAC Foundation study looked at fuel consumption data and average daily pumps prices since 28 February and compared them with pre-war prices.Last week, global oil prices surged above $100 a barrel for the first time since July as the conflict in the Middle East escalated.Brent crude, the international benchmark for oil prices, rose by more than 3% to top $101. Today it was trading at around $106 to $108 a barrel.Oil prices have been pushed up by the effective closure for many months of the Strait of Hormuz, through which around a fifth of oil supplies travelled before the war.It has sent pump prices spiralling in other countries too, with many Western governments slashing fuel taxes to help out hard-pressed motorists.Last week, US President Donald Trump tried to claim soaring prices were due to the war in Ukraine rather than the conflict he started with Iran.He said Ukrainian president Volodymyr Zelenskyy had to ‘stop knocking out diesel fuel in Russia’ because this was leading to a ‘shortage of diesel fuel’.He made the remarks two days after diesel prices in the US hit a record high and as he faces pressure amid predicted losses in November's US mid-term elections.The RAC's Simon Williams added: 'Both fuels are now at prices last seen in early August 2022, just a few months after the start of the Ukraine War, following price rises of 8p a litre since the start of September.'And with oil well over $100 a barrel, there's no end in sight to high pump prices and the pain it brings to drivers who depend on their vehicles.'Today's surge means average diesel prices are now close to the all-time record of 199.05p a litre. The fuel hit this price in June 2022 in the wake of Russia’s invasion of Ukraine. The Treasury was contacted for comment.