Chancellor George Osborne announced he was cancelling this September’s fuel duty increase altogether during his Budget statement today.

It is the second time he has scrapped the fuel duty in the last six months

“Petrol will now be 13 pence per litre cheaper than if we had not acted over these last two years to freeze fuel duty,” Osborne said.

“For a Vauxhall Astra or a Ford Focus that’s £7 less every time you fill up.”

The Chancellor’s decision makes good sense, according to the AA, which said a fuel duty hike would have been the straw likely to break UK drivers’ budgets.

Edmund King, AA president, said: “A September fuel duty hike would have led to a summer of discontent. Scrapping the fuel duty hike is a pragmatic move and will bring some relief at the pumps. Already 76% of AA members are cutting back on journeys, household expenditure or both, due to the high cost of fuel.

“With current fuel prices at 138.42 for petrol and 145.24 for diesel, drivers will welcome the scrapping of the fuel duty hike with relief rather than with joy. Prices are almost 5p a litre higher than when the Chancellor froze fuel duty in March 2011.”

The latest fuel price swing, through February and March 2013, peaked at 140p a litre. Had January’s scheduled 3p rise in fuel duty gone ahead, attracting an additional 0.6p in VAT, it would have propelled the UK average petrol price well beyond the current record price of 142.48p.

Miranda Schunke, spokesperson for Green Flag, said: “We welcome the government’s decision to cancel the planned increase in fuel duty. Household budgets are already being stretched to the limit with the spiralling cost of living. While the cost of motoring is a constant concern, it will be a relief to millions of motorists that there is some respite against the escalating financial burden of owning and running a car.”