AN SNP MP has urged Rishi Sunak to bring in a regulator for fuel duty as the costs of a tank of petrol reach record highs. 

Alyn Smith, SNP MP for Stirling, has written to the Chancellor today calling for him to consider appointing a watchdog, warning that the situation "will not stabilise in the short to medium term". 

It comes as the price of fuel rose to a record high, with a litre of petrol costing 163.5p, while diesel was 173.4p per litre yesterday. 

A month ago the pump prices were 148p per litre of petrol and 151.6p per litre of diesel.

In his letter, Mr Smith suggested using the additional VAT raised from the surging fuel prices to lower fuel duty, which would then enable sellers to pass the savings on to consumers.

However the Treasury insisted there has been no 'windfall' in VAT receipts and fuel duty has already been frozen, which they say saves drivers £15 every time they fill up their tanks. 

Mr Smith wrote: "Families and key sectors like the haulage, transport and soon construction industry are suffering from forecourt costs.

"These costs are unaffordable for many and in a rural constituency such as mine cars and public transport are essential for peoples everyday lives.

"Furthermore, this is having a huge effect on the cost of distribution of goods."

Mr Smith said the reduction in fuel duty "would help alleviate some of the pressure of the cost of living crisis and also give assurances to constituents and businesses that the Government is taking real action to address these problems."

The MP said: "Our economy has been battered by the 2008 financial crisis, 10 years of Tory austerity, Brexit, the Covid-19 pandemic, and now a cost of living crisis as inflation jumps and the cost of essentials skyrockets.

"Coupled with increases to national insurance contributions, student loan repayment changes and benefit cuts, we really must question the grip this UK Government has on the basics.

"Russia’s invasion of Ukraine will only exacerbate these tensions, but it is by no means the sole cause.

"Years of macroeconomic mismanagement by Westminster has left us in a far more vulnerable state to begin responding to this unfolding crisis."

He added: "I call on the UK Chancellor to urgently get a grip of the situation, and use his upcoming spring budget statement to roll out much needed assistance to households across Stirling.

"A fuel duty regulator is an important step in addressing the dysfunction present in the UK market, whilst bumper VAT intake from fuel duty should be swiftly deployed to alleviate the pressure households face."

A UK Treasury spokesman said: “There has been no ‘VAT windfall’ and receipts this year are forecasted to be £2 billion below the amount collected directly before the pandemic.

“To keep costs down, fuel duty has been frozen for the twelfth year in a row, which will save drivers around £15 every time they fill up their tank compared to pre-2010 plans.

“We’re providing around £21 billion this financial year and next to help families, which also includes cutting the Universal Credit taper rate, freezing alcohol duty, and helping households with their energy bills through our £9.1 billion Energy Bills Rebate.”