The Government’s previous plans for hiking fuel duty by 3.02ppl from 1 January with 20% VAT would have pushed pump prices up by 4.00ppl and would have added almost £2 a tank for the average car filling up.

The Government had been expected to postpone the increase in April but actually cancelled it altogether, saying that it would help with the cost of living for families as well as helping businesses.

In addition the Chancellor has announced that subsequent fuel duty increases will be deferred from 1 April to 1 September for the remainder of the current Parliament.

ACFO chairman Julie Jenner commented of the fuel duty rise cancellation: ‘The Chancellor’s Statement clearly clarifies that businesses can plan their fuel budgets and journey management strategies for the next eight months without fear of further fuel duty rises.

‘That is a great help. However, the Chancellor could have truly kick-started economic recovery by cutting fuel duty with immediate effect.

‘Pump prices are already at, or close, to record levels, and while the decision on duty will not immediately increase fleet costs the Chancellor has done nothing to reduce the cost of fuel for employers and private motorists.

‘Cars and commercial vehicles are a business necessity for the vast majority of organisations which remain burdened by extremely high fuel prices.’

And Edmund King, president of the AA, added the association believes if the Chancellor wants to beat his record fuel duty haul of £27.26 billion (2010/11), the Government should tackle the inflated pump prices that are driving lower-income motorists off the road and cutting contributions to the Treasury.