FairFuelUK was preparing to deliver a 150,000-signature petition to the Treasury demanding action on fuel duty before the government announced a major U-turn on the tax.
The campaign had been due to hand in the petition later today, calling on Rachel Reeves to keep the 5p fuel duty cut and freeze the tax for the rest of this Parliament.
Instead, Keir Starmer confirmed the 5p cut will be extended until the end of the year rather than being phased out in September.
The reduced rate was first introduced by the previous Conservative government in 2022 after Russia’s invasion of Ukraine sent fuel prices soaring and has since been repeatedly extended.
The PM told the commons: “We’re backing drivers by extending the freeze on fuel duty.”
Downing Street said the move would cost £455m in the current tax year, with officials saying stronger economic growth had given the government room to act.
The Prime Minister said the decision had been taken because of the impact of events in the Middle East.
Petrol and diesel prices have risen sharply since the start of the US-Israel war in Iran, which has disrupted global oil and liquified natural gas supplies.
The RAC said the average price of petrol reached 158.52p a litre on Monday, the highest level since the start of the Iran war.
Starmer also announced a temporary cut in the fuel duty rate on red diesel, reducing it by more than a third to 6.48p per litre from the middle of next month until the end of the year. That measure is expected to support farmers using tractors and agricultural machinery.
The government will also introduce a 12-month vehicle excise duty holiday for HGVs, which it says will help hauliers facing higher supply chain costs that can feed into consumer prices. This is expected to save around £600 for a typical heavy lorry.
But questions remain over what happens next year.
RAC Head of Policy Simon Williams said: “Will drivers be hit with the full 5p in one go in the spring, will a new phasing be agreed, or will the government even abandon an increase altogether?”
Conservative leader Kemi Badenoch thanked Starmer for what she called a government “U-turn” on fuel duty.
Shadow Chancellor Sir Mel Stride said: “Labour’s fuel tax hike would have hurt businesses and hammered hardworking families already stretched to breaking point.”
He added: “After pressure from the Conservatives and Fair Fuel UK, Reeves has finally been forced into a U-turn.”
Howard Cox, Founder of FairFuelUK, said: “I am delighted that Fuel Duty will continue to be frozen following FairFuelUK Supporter and Tory pressure.”
But he said the freeze does not go far enough, arguing motorists need immediate relief.
He added: “40 countries have already supported their motorists since the beginning of the Iran conflict by reducing fuel taxes or similar. With a shed load of new VAT pouring into the Treasury there is ample room to cut duty by 20p. The positive impact on the economy would be monumental.”
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