The Government's planned 3p-a-litre rise in fuel duty has been scrapped.
Chancellor George Osborne had been expected to postpone it until April, but he used his Autumn Statement to reveal the oft-delayed increase had been dropped altogether.
The increase was originally scheduled to take place in August 2012.
The Government now has no plans to increase fuel prices until September 2013, with Osborne confirming that the cost of petrol will not go up in line with inflation until then at the earliest.
Motorists will benefit from further investment in the road network, because Osborne also announced that a further £1billion will be spent on improving roads. The roads set to benefit include the A30 in Cornwall, the A1 at Newcastle – which will be upgraded to motorway standard – and the M25 at Thurrock, Kent. The A5 will be linked to the M1 motorway.
AA president Edmund King welcomed the announcement, saying: 'We welcome the commitment to upgrade the A1 Newcastle to motorway standard, which will boost the economy of the North East and improve safety.'
He also praised the Chancellor for the fuel duty announcement, saying: 'A near £2-a-tank hike in petrol and diesel prices would have backfired on the Government and the economy.'
By Tom Webster
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