Chancellor postpones fuel duty rise

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Chancellor Alistair Darling has offered some respite to motorists by postponing April's scheduled 2p-a-litre rise in fuel duty until October.

But he added that fuel duty would increase by 0.5p a litre in real terms from 2010.

Mr Darling said: "Fuel duty is due to rise again in April but, because I want to support the economy now and help business and families, I will postpone that increase until October."

AA president Edmund King said: "This temporary relief should quell any panic at the pumps. The Chancellor has listened to us and made a sensible decision.

"The proposed increase would have taken fuel prices to new record levels. Two pence might not sound like much but when it is added to the 20p-a-litre increase in pump prices in the last year it could have been the last straw for many motorists and hauliers.

"If fuel prices remain at records levels in the autumn the increase should be scrapped."

David Frost, director-general of the British Chambers of Commerce, said: "With the price of petrol at the pump rocketing, the Chancellor was right not to introduce the proposed 2p rise in fuel duty.

"However, as the Chancellor reduces his own economic growth forecasts, he should have said that he is scrapping the 2p rise rather than merely deferring it.

"Businesses and motorists are being squeezed by higher fuel costs and the Government is getting an unexpected windfall due to higher duty receipts. There is no justification for a 2p rise in October."

The Freight Transport Association welcomed the 2p postponement, saying it would save the industry about £140 million. But it added that any increase should have been put off for at least a year while the market remained so turbulent.