Also announced as part of today’s annual Budget was the announcement that the Labour party’s fuel duty escalation was scrapped in favor of a new 'fair fuel stabilsier'. An inflation-linked rise in the fuel duty planned for next week was delayed until next year.
"It's about doing what we can to help with the high cost of living and the high cost of oil," the chancellor said, according to the BBC.
"The fuel duty escalator, that adds an extra penny on top of inflation every year, will be cancelled," he added, "not just for this year, or next year, but for the rest of this Parliament".
This escalation was introduced by the previous government. If the old system was in place, the price of fuel would have risen by 1p per liter plus inflation.
"We will delay the inflation rise in duty planned for next week until next year - and also delay the April 2012 inflation rise until the following summer," Osborne said.
The Society of Motor Manufacturers and Traders has welcomed today's budget. "The outlook is certainly still challenging, but we are encouraged by the impact these measures will have on our sector and the wider economy," said chief executive Paul Everitt.
The cut will actually be financed by taxing the oil industry, as “from tomorrow the supplementary charge levied on oil and gas production will increase from 20% to 32%.”
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