A suspension in the increase to fuel duty has been announced by the chancellor of the exchequer.
The government officially postponed its increase to fuel tax today.
On October 1st, road fuel duty was to have risen by 2p under the treasury's previous plans. However, with the suspension of the increase, the tax will remain at 50.35p per litre. Price pressures on families due to inflation were cited as the main reason for the move, although the government also claimed today that fuel tax is currently 17 percent lower in real terms than it was nine years ago.
Yesterday, the monthly results of the Consumer Price Index were released, with the government's preferred inflation benchmark found to stand at 3.8 percent; this is a 0.5 percent rise over the previous rate, and is also 1.8 percent above target. Big increases in food and fuel, which have themselves been driven by record wholesale oil costs, were blamed for the inflationary trend.
Announcing the suspension, chancellor of the exchequer Alistair Darling commented: "The global credit crunch and sharp rises in world oil prices have pushed up prices at the pump. Today's decision will help motorists and businesses get through what is a difficult time for everyone."
Last week, crude oil reached a record wholesale price of over $146 on the New York exchange.
