Autumn Statement 2013: The government is to cancel the fuel duty increase which was planned for 1 September 2014.
The rise was expected to be 1.61 pence per litre but the cancellation means the price of fuel will be frozen until 2015.
It is the second time the government has scrapped a fuel duty rise, Chancellor George Osborne cancelled a 3p fuel rise in the March 2013 budget.
The government has forecast in the Autumn Statement that fuel duty will fall by 14%, with pumps now 13p per litre cheaper and Osborne announced fuel will decrease by a further 20p by 2015.
It means employees with company cars will save £7 when filling up their tanks and £11 less by the General Election in 2015.
Osborne is also introducing legislation to reduce tax administration costs and burdens by allowing motorists to pay for vehicle excise duty by direct debit annually, biannually or monthly, and will scrap paper tax discs from 1 October 2014.
David Brennan, managing director of LeasePlan, said: “The Chancellor’s Autumn Statement is good news for drivers and for the wider economy. The announcement of a further fuel duty freeze shows that the government understands the important role our nation’s drivers play in the economic recovery.
”With UK fuel prices among the highest in the world, this measure will go some way to easing the ongoing financial challenges faced by motorists and businesses.
”We are also pleased to note the simplification of the outdated vehicle tax disc system, and we will be advising our [employer] clients of the changes once final details are confirmed.”