Chancellor reduces fuel cost by 1p

Chancellor George Osborne has given some details of his latest Budget, which has included moves designed to take some pressure of the embattled motorist.

The price of petrol and diesel will be cut by 1p a litre, as of 6pm on Wednesday, freeing up some pennies forcar insurance cover.

The Chancellor also announced the introduction of a "fair fuel stabiliser", which is said to help keep future fuel costs down and will be paid for by oil and gas companies.

Other measures highlighted by Mr Osborne:

:: Vehicle excise duty increases in line with inflation but frozen for heavy goods vehicles

:: Fair fuel stabiliser funded by raising supplementary charge on North Sea production from 20% to 32%, as of Thursday March 24

:: Next week's rise in fuel duty delayed until 2012

:: Fuel duty escalator cancelled for the rest of current Parliament

:: £100 million for pothole repairs.

RAC Foundation director Professor Stephen Glaister said: "The Chancellor has done the simple and correct thing in cutting fuel duty immediately and 34 million drivers will welcome this, as will hauliers.

"He is also right to link the level of duty to the underlying price of oil rather than use above inflation rises to indiscriminately raise money from motorists who effectively have no choice other than to run their cars."

Mr Osborne also announced that the approved mileage allowance payments for those using their own vehicles for work would rise from 40p to 45p per mile for the first 10,000 miles and 25p per mile thereafter.

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