George Osborne has announced that the 3p per litre rise in fuel duty, scheduled for September, will be scrapped.
The Government has also extended the cut-off date for road tax exemption, for classic cars, by one year. From 1 April 2014 vehicles manufactured before 1 January 1974 will be exempt from paying road tax.
In order to reduce administration costs, SORN - Statutory Off Road Notifications - will now last indefinitely and not require renewing every year. The grace period for not displaying a tax disc, once you have paid for it, has additionally been extended to 14 days.
There's good news for company car drivers too. Benefit-in-Kind tax will be 5 per cent of the P11D value of electric vehicles, from April 2015, instead of the 13 per cent previously announced.
The planned increase in fuel duty would have further pushed up the continually escalating cost of motoring.
Fuel for an average diesel car, travelling 10,000 miles a year and returning 40mpg, currently costs approximately £1,645 a year.
If the fuel duty rise had come in to play, that figure would have risen to £1,679. Motorists would have consequently had to pay an additional £34 a year.
The abolishment of the plan means that fuel duty will have been frozen for around three and a half years. The Government stated that "Pump prices are 13p per litre lower from April 2013 than under previously announced plans."
Chancellor George Osborne thanked Harlow MP, Robert Halfon, for campaigning to abolish the fuel duty escalator.