George Osborne cancelled a 2p-a-litre rise which was due to come into force next September.

Fuel duty will remain at 57.95p per litre – where it has been since March 2011 – for the remainder of this parliament.

The move will save the average motorist £11 every time they fill their tank by 2015-16.

Average pump prices will be 20p per litre lower than under pre-2010 plans, the Chancellor said.

Lucy Burnford, founder of Motoriety.co.uk, said: “Cancelling planned fuel duty rises looks like a sweetener in the face of persistently high prices at the pumps – but really it’s a red herring. A decrease in fuel duty would be a real win for motorists.

“The freeze is merely a token gesture because the effect will be a drop in the ocean when it comes to the overall cost of keeping a car on the road. The average motorist must budget £2,746 per year, plus tax and insurance, which can be a massive strain on already cash-strapped households.”

The Chancellor also confirmed paper tax discs will be replaced with a new electronic system from next October.

This news has been welcomed by the motoring industry.

Burnford said: “It’s high time the government hauled the motoring industry into the digital age. Making the tax disc system electronic should result in a massive decrease in the number of motorists who get stung with fines of up to £80 – more if they get clamped or impounded – through sheer absentmindedness. Most people don’t mean to break the law.

“The move towards an electronic tax system acknowledges the long-standing issue of car admin and paperwork that has blighted car owners for years. It’s a win for motorists who, already facing extortionate prices at the pumps, need easier ways to manage the other financial pressures of car ownership too.”

In other good news, rail fares in 2014 will be capped in line with inflation, complementing the decision by the Mayor of London to cap average fare increases in London for 2014.