The Chancellor of the Exchequer, George Osborne, has announced that the 3p-per-litre hike in fuel duty, scheduled for September, will be scrapped.
The fuel duty rise was originally planned for introduction in September. Had it have gone ahead, the cost of fuelling the average car, travelling 10,000 miles a year and returning 40mpg, would have increased from £1,645 to £1,679.
Fuel duty has not gone up since January 2011 -- the longest period without an increase in more than 20 years -- and the Government claims that fuel is now 13p-per-litre cheaper than it would have been under a Labour Government.
Edmund King, AA president, said: "A September fuel duty hike would have been the last straw likely to break UK drivers' budgets and 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."
There's more good news for classic car owners too as the cut-off date for road tax exemption for classic cars has been brought forward a year, from 1 January 1973 to 1 January 1974. This means that from 1 April 2014, cars built before 1974 will not be subject to road tax.
The Government has also simplified the SORN (Statutory Off Road Notification) system. At the moment, owners are required to renew their car's SORN annually; however, SORN will now last indefinitely in order to reduce administration costs.
Company car drivers are set to benefit from the budget too. Benefit-in-Kind (BIK) tax will now be just 5 per cent of the P11D value of electric vehicles from April 2015, instead of the previously-announced figure of 13 per cent.
