Chancellor postpones January fuel duty increase

Chancellor George Osborne has postponed the increase in fuel duty, originally planned for January 1, in his autumn statement.

The postponement has been welcomed by motoring organisations.

The planned 3p increase has been deferred until August 2012. A second increase planned for August has been cancelled.

The Chancellor said that the changes would mean that filling the average family car would be £144 cheaper over the course of 2012 than it would have been under his original plans.

Osborne cut fuel duty by 1p and scrapped the annual fuel tax escalator – which saw duty rise by 1p above inflation each year – in his budget in March.

A recent report, commissioned by the RAC, had found that motoring costs had risen by 14 per cent over the last 12 months – three times the rate of inflation.

In his statement, the Chancellor said that for most people their vehicle was not a luxury but a necessity.