MOTORING groups welcomed a "truce in the war on motorists" as the Chancellor scrapped a planned hike in fuel duty despite plunging oil prices returning the cost of petrol to its lowest level in five years.
George Osborne confirmed that the Government would cancel the RPI inflation fuel duty increase of 0.54 pence per litre which was scheduled to come into effect from September 1 this year.
"I want to make sure that the falling oil price is passed on,' said the Chancellor, who called the five-year amnesty the longest fuel duty freeze for two decades.
He claimed that his move would save motorists £10 every time they fill up - or £675 a year by 2016, according to Whitehall estimates. Hauliers will do even better, saving an estimated £21,000 per lorry annually.
It comes after the price of petrol dipped below 110p per litre in January, its lowest level since January 2010.
The AA welcomed the move but warned any future government that they would get a frosty reception if they were tempted to raise fuel duty in the short term.
The organisation added that UK road fuel tax continues to be the highest in the EU.
Edmund King, AA president, said: "The Coalition has done its 'fuel duty' by shielding drivers from some of the impact of volatile fuel prices over the past four years by freezing fuel duty and we welcome the further freeze and cancellation of the scheduled fuel duty rise for September 2015.
"With petrol and diesel prices surging and falling by more than 35p a litre since 2010, the continued four-year fuel duty freeze allows the Coalition to dodge the fuel-protest bullet."
AA members have called for two-thirds of fuel duty to be invested back into roads for resurfacing, repairs, cycleways and other improvements.
RAC chief engineer David Bizley said: "Mr Osborne has clearly taken an opportunity to maintain the truce in the 'war on motorists' whilst tying the hands of any new incumbent of No 11. Freezing fuel duty beyond the end of this Parliament is therefore a very shrewd move as it would be extremely unpopular for any future Chancellor to unfreeze it.
"Private motorists and businesses have benefitted considerably through both a cut and freeze in fuel duty in Mr Osborne's time as Chancellor.
"What we need now is a firm commitment from all political parties ahead of the election not to reverse his decision as soon as they take office as this would be a retrograde, harmful step that will lead to an increase in both household and business costs and dampen economic growth."
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