The four-year-long fuel-duty freeze has been extended into the autumn by the chancellor.
George Osborne said the fuel duty rise scheduled for September had been cancelled – a move welcomed by motoring groups.
The chancellor said: “I want to help families with the cost of filling up a car. It’s a cost that bears heavily on small businesses too.
“The last government’s plans for a fuel duty escalator meant taxes would rise above inflation every year. But I want to make sure that the falling oil price is passed on at the pumps. So I am today cancelling the fuel duty increase scheduled for September.”
RAC Foundation director Professor Stephen Glaister said: “With fuel duty revenue making up about 5% of the Treasury’s tax income there was never going to be a huge giveaway as the Chancellor still desperately needs motorists’ money.
“But with the latest figures showing that almost a million of the poorest households see a quarter of what they spend go on buying and running a car the continued freeze is very welcome.
AA president Edmund King said: “The coalition has done its ’fuel duty’ by shielding drivers from some of the impact of volatile fuel prices over the past four years by freezing fuel duty and we welcome the further freeze and cancellation of the scheduled fuel duty rise for September 2015.
“With petrol and diesel prices surging and falling by more than 35p a litre since 2010, the continued four-year fuel duty freeze allows the Coalition to dodge the fuel-protest bullet .”
Among other transport measures announced were more than £7 billion worth of transport investment in south-west England, including better roads, support for air links and a new rail franchise which will bring in fast and improved train services.
Mr Osborne also said the Government was investing £100 million “to stay ahead in the race to driverless technology”.
He said that to encourage a new generation of low-emission vehicles he was increasing their company car tax more slowly than previously planned, while increasing other rates by 3% in 2019-20. Mr Osborne also said he was reducing the toll rates on the England-Wales Severn Crossings from 2018.