The AA said the freeze, which has been in place since March 2011 was a "very welcome relief for UK drivers".
The organisation's president Edmund King said with inflation hit earnings effectively at 2002 levels it was vital to make even a short-term cut in fuel duty to get people motoring again.
He said: "The freeze still leaves the squeeze on families and businesses that rely on four wheels to function and prosper." The freeze was backed by the convenor of Western Isles Council.
However, Norman Macdonald said it would not solve the issues faced by drivers in the most remote communities who face far higher forecourt prices.
He added: "Obviously we are pleased that there is not going to be an increase in fuel duty.
"It does nothing to tackle our big disadvantage, which is the differential that still exists between the price at the pumps here in the islands and the mainland.
"It also does nothing to tackle the difference between remote areas of the mainland and centres of population."
There is currently a 5p a litre rebate for the Scottish islands.
Mr Macdonald called on the government to look at wiping out the price difference between the Western Isles and the mainland.
At present, it stands at between seven and eight pence for a litre of fuel.
Former Top Gear presenter Quentin Willson, who leads FairFuelUK said the Budget was a "lost opportunity" to cut fuel duty and ease the burden on families and businesses "when the economy is still fragile."
Professor Stephen Glaister, director of the RAC Foundation, said the fuel duty freeze was good news, but warned the UK's drivers still pay the highest proportion of fuel tax in Europe.
He added: "The Treasury's own analysis shows cuts to duty would boost the nation's economic output.
"Yet the stubbornly high pump prices mean transport costs remain a real concern for the record 18 million people who rely on a car to get to work.
Mr Osborne also announced that following the severe winter weather, he was making an extra £200 million available to local authorities to repair potholes.
Sustainable transport group Sustrans said: "Any money to repair damage to our roads is welcome but, considering the £10bn road maintenance backlog, £200m is not enough."
Mr Osborne announced a 2% increase in company car tax would be extended to 2017 and 2018, but there would be an increase in discounts for ultra-low emission vehicles and a reduction in the rate of fuel duty for methanol.
The Government is offering to extend the feasibility study on possible improvements to the A1 further north into Scotland, if the Scottish Government will match the costs of the study.
Car tax would increase by the RPI rate of inflation from April 1 2014 but, as announced earlier, VED rates for lorries will be reduced and restructured from April 1.