Fuel
Reports have warned that George Osborne could increase the fuel duty rate in his emergency budgetGetty

Fears that George Osborne could break his promise to freeze fuel duty again next month has prompted 20,000 motorists and campaigners to write to their MPs over the issue.

The move comes after The Times and its sister paper The Sun On Sunday reported that "Conservative sources" warned that the Chancellor of the Exchequer could go back on his election vow to keep the tax on petrol and diesel at 57.95p a litre.

Osborne's election promise not to raise income tax, national insurance or VAT leaves him few options to raise revenue and fuel duty offers rich pickings for the boxed-in Treasury supremo.

The papers warned that he could make the hike in his emergency budget on 8 July. The Office for Budget Responsibility (OBR) has said that, if the levy increases in line with Retail Price Index (RPI) inflation, the rate could hit 64.91p by the end of the Parliament in 2019/20.

But, despite the popularity of the freeze among motorists, the Institute for Fiscal Studies (IFS) think-tank has estimated that the Treasury could miss out on £4bn ($6.2bn).

Howard Cox, founder of the FairFuel campaign, told IBTimes UK that he is working with some Labour, Tory and SNP backbenchers on the issue.

He added: "The chancellor will be breaking his promise to 37 million drivers, the haulage industry and businesses by raising fuel duty even if rumoured only by inflation.

"Frankly this alleged initiative is pure economic perversity totally out of character with traditional Conservative taxation philosophy.

"Our supporters will be very angry and feel betrayed by this new administration's U-turn on taxing fuel. We will be campaigning hard to stop this foolhardiness. Already 20,000 of our supporters have emailed their MP in just 48 hours in disgust."

Labour failed to rule out any hikes to the fuel duty in the run-up to the election, instead promising to not increase VAT or National Insurance contribution rates.

Harriet Harman, then deputy leader of Labour, told LBC radio in April that the other taxes, including those relating to fuel, would be laid out in the party's first budget.

The Conservatives and Osborne seized on the comments at the time and claimed Labour would increase the levy if they gained power.

The chancellor said: "Now we know. Ed Miliband will put up taxes on hardworking people. It's clear that he is planning to bring back the last Labour government's 'fuel duty escalator'."

A Treasury spokesperson told IBTimes UK that the ministry does not make comments on press speculation in regards to The Times and Sun On Sunday reports.