David Cameron urges Sunak to cut tax on fuel as petrol hits £2 a litre

David Cameron has suggested that the government cut taxes instead of raising them and warned that there will be a “huge squeeze” on living standards.

The former prime minister said that it would be a “very tough year” as he urged the government to help people with the soaring cost of living.

National insurance for employers and employees is due to rise by a combined 2.5 percentage points next month to fund efforts to cut an NHS backlog and pay for an overhaul of social care. Rishi Sunak, the chancellor, told the cabinet on Tuesday that the tax rise would go ahead, despite growing calls from Conservative MPs for it to be dropped to help people facing sharply rising inflation and energy bills.

Petrol smashed through the £2-a-litre barrier at a filling station in west London yesterday, squeezing household budgets further. The forecourt in Chelsea was charging 219p for a litre of diesel and 218.9p for unleaded, believed to be the highest in the country. Stations elsewhere are charging more than 190p a litre and some motorists have reported queues at forecourts as drivers seek to beat further increases.

Cameron told Andrew Marr on LBC radio that the government should “keep people’s taxes down” as he suggested it should reconsider the national insurance rise.

“We’re certainly looking at a huge squeeze on living standards when you see what’s happening with oil prices and petrol prices, you see what’s happening with people’s heating bills,” he said. “It’s going to be a very tough year . . . What can we do to help people? That’s the question at this difficult time. How do we address cost-of-living pressures?

“I’m often criticised for the difficult decisions we made on the economy, but you’ve got to try and keep the cost of government down. Because ultimately if you can keep the cost of government down, people’s taxes down, you help them through the cost-of-living crisis.”

Average household energy bills are forecast to rise to up to £3,000 a year in October because of soaring wholesale gas prices after Russia’s invasion of Ukraine. Inflation could peak at more than 8 per cent in the coming months.

Cameron said that President Putin was a “phenomenal liar”, highlighting confrontations over the presence of Russian troops in the Donbas and the shooting down of a Malaysia Airlines flight in 2014.

The Moto Services at Junction 47 of the M4 near Swansea was charging 192.9p for diesel yesterday. A garage in Norwich was charging 199.9p for diesel and a filling station on the A23 near Brighton was advertising a litre for 189.9p.

Figures from the data company Experian Catalist show the average cost of a litre of petrol at UK forecourts on Tuesday was 158.2p, up from 156.4p on Monday. The average cost of a litre of diesel reached a new high of 165.2p on Tuesday, up from 162.3p on Monday.

In reality, costs for many drivers are far higher, as the Experian Catalist figures are nationwide averages. A year ago the price per litre of petrol and diesel was 124.32p and 127.25p respectively.

FairFuelUK, the campaign group, is urging Sunak to cut fuel duty to ease the pressure on inflation, small businesses and hauliers.

Motorists pay 57.95p in duty on every litre of fuel.