Autumn Statement: Petrol duty rise scrapped

The tax was due to rise by 3.02p per litre on 1 January 2013, but George Osborne revealed in today's Autumn Statement this hike will be axed.

The true rise would have been 3.6p per litre, as VAT is charged on top.

Of course, this doesn't mean prices are coming down, just that the tax won't rise next year.

The fuel duty rise was originally due on 1 August this year, but Osborne announced a few months earlier he would delay the hike until January.

The Government will also postpone a planned rise in April next year to September 2013. The amount of this rise is unknown.

According to website Petrolprices.com, average petrol prices stood at 133.25p per litre on Monday, while diesel prices were 141.23p per litre on average.

Fuel duty and VAT combined currently make up about 60% of fuel prices.

The decision was welcomed by AA president Edmund King.

He says: "This decision avoids a new year headache and a long hangover for all drivers and is very much welcomed by the AA.

"Big Ben's chimes ringing in a nearly £2-a-tank hike in petrol and diesel prices would have backfired on the Government and economy."