It was widely expected that a three-pence increase in fuel duty would come into force this August; however in a move which is likely to cost over £500 million, the Chancellor has announced that this will now not happen.
Making the announcement in the House of Commons during a regular session of Treasury questions, Mr Osborne said: “We will stop any rise in fuel duty this August and freeze it for the rest of the year.
“We are on the side of the working families and businesses; and this will fuel our recovery at this very difficult time for the world.”
The Chancellor’s apparent U-turn is said to have surprised many MPs, and came hours after Labour had called for the rise to be scrapped.
Following the announcement, RAC Foundation’s director Professor Stephen Glaister, said: “This is good news for drivers and good news for the country.
“Given that tax makes up around sixty percent of the pump price, falls in the price of oil were only ever going to go so far in easing the financial burden on motorists.
“Road transport powers the nation's economy and it is welcome that the Chancellor recognises the huge pressures the country's thirty-five million drivers are under with transport being the biggest single area of household expenditure bar none.”
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