Rachel Reeves has been urged to scrap the proposed hike in fuel duty amid fears the Middle East crisis could trigger panic buying at the petrol pumps. Global oil and gas prices have skyrocketed after attacks on tankers and a major refinery in the Gulf.

The Chancellor announced last year that the long-held discount in fuel duty would be scrapped from September, with a 1p hike followed by two increases of 2p each in subsequent years. But following the US and Israeli attacks on Iran at the weekend – which killed the country’s Supreme Leader Ayatollah Ali Khamenei – concerns have been raised about the impact of oil price hikes which could hit consumers at the pumps. Following the attack, the price of oil jumped to 80 US dollars a barrel, with some analysts suggesting it could rise above 100 dollars.

Saudi Arabia’s Aramco oil refinery has been hit by an Iranian strike while Qatar halted liquefied natural gas production after being targeted by Tehran.

Gas prices have now leapt at the fastest pace since the outbreak of the Ukraine war.

The shutdown poses a risk to inflation in Britain, which relies on Qatar for about 2% of its imports.

Ms Reeves will use today’s spring statement to claim the Government has the right economic plan for Britain.

She will stress the importance of ensuring stability in our economy in an increasingly uncertain world.

She is expected to say: “This government has the right economic plan for our country in a world that has become yet more uncertain.

“Stability in the public finances, investment in infrastructure and reform to our economy.

“Building growth not on the contribution of a few people or a few parts of the country, but in every part of Britain with a state that doesn’t stand back, but steps up.”

She will add: “Because of the decisions we have already taken, we have a stronger and more secure economy. Inflation and interest rates falling. And in every part of Britain, working people are better off.”

But campaigners have urged the Chancellor to take action on fuel duty to avert an impending crisis on petrol station forecourts.

Howard Cox, Founder of FairFuelUK, said: “In light of the ongoing crisis in the Middle East, Rachel Reeves must declare in her spring statement that Fuel Duty will remain frozen for the duration of her Parliament and cancel any planned increases in the Autumn Budget.

“This move would not only be economically prudent, stimulating GDP growth and alleviating inflationary pressure, but it would also provide some much-needed political relief to this government, known for its frequent U-turns.”

If the Treasury’s current plans for fuel duty go forward, the tax will gradually increase from September 2026 to reverse the 5p cut that was introduced in 2022 as a temporary measure. The 5p cut was originally meant to expire in March 2026, but was extended.

Speaking ahead of the spring statement, SNP economy spokesman Dave Doogan said: “With real fears that prices at the pump are now set to soar because of the situation in the Middle East – instead of stubbornly doubling down, the Chancellor needs to scrap her price hike plans before motorists face a devastating double hit.

“Oil prices are already spiking – the last thing motorists and businesses now need is another damaging tax hike from the Labour Party.

“The Chancellor needs to see sense, recognise what is unfolding globally, and immediately scrap her plans to hike prices at pumps.”

A spokeswoman for the Treasury said: “We have extended the 5p fuel duty cut from this month to the end of August to support drivers across the country.”

Stock markets around the world have also plunged amid the ongoing turmoil.

After the FTSE 100 hit record highs last week, the UK’s leading stock market index closed down 130 points, or 1.2%, at 10,780.

Analysts fear a fresh bout of inflation driven by disruption to energy markets.

Iran reportedly warned tankers on the Strait of Hormuz that no ships would be allowed to pass, while insurers cancelled policies and raised cover prices.

Neil Wilson, of Saxo Markets, said: “We are a long way off 2022 in terms of pricing but if LNG to Europe is effectively shut via Hormuz for a prolonged period we could see chaos. I am much more concerned about European natural gas prices than oil prices.”