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The Chancellor postponed the planned fuel duty increase of 5p per litre, due to take effect next month, till 2012, as well as bringing in a 1p per litre cut in the price from 6pm yesterday. 

And the annual fuel duty escalator, introduced by the Labour government, has been scrapped until 2015 and replaced by a fair fuel stabiliser. This will work by raising fuel duty in line with inflation when oil prices are high and lowering it when oil prices fall. 

The cut in duty is to be financed by a North Sea supplementary charge which increases tax on oil and gas production by 20% to 32%. 

Osborne also announced that vehicle excise duty on HGVs will be frozen this year and next. 

Campaign group FairFuelUK, which includes the Road Haulage Association (RHA) and Freight Transport Association (FTA), said yesterday was “the first time in living memory that there has been a reduction in fuel duty”.

Peter Carroll, campaign founder, said: “The decisions are very welcome indeed. 

“All our team’s hard campaigning is bearing fruit – but we still need to continue our push for even lower and more affordable levels in fuel prices for the long term.” 

Geoff Dunning, CEO of the RHA, said: “Today’s news will get a cautious welcome from UK hauliers. 

“We must all remember that fuel prices still remain perilously high, due to the draconian size of government duty compared with the rest of Europe. However, we could have been looking at a 6p rise in fuel prices and instead, we have a lowering in fuel duty. 

"Maybe a precedent has now been set to help our industry start recovering from the relentless recent price increases in fuel.” 

Simon Chapman,Chief Economist at the FTA, said: “Times are incredibly tough in the logistics sector right now, with carriers unable to recoup rising costs and facing a cash flow squeeze. 

“The Chancellor is right to recognise that going ahead with an above-inflation fuel duty policy would have been suicidal for the UK’s economy. And his decision to keep vehicle excise duty levels unchanged shows how intently government has listened to us.”