Mr Sunak said he was “not prepared” to increase fuel prices to “keep the cost of living low”. There have been widespread rumours fuel prices could rise by up to 5p per litre at the budget but plans to do so have been scrapped.
Speaking in the House of Commons, he said: “To keep the cost of living low I’m not prepared to increase a tank of fuel.
“So the planned rise in fuel duty is also cancelled.”
The news has been praised by Conservative MPs and fuel campaigners pushing for no increases to the heavy tax.
Craig Mackinlay, MP for South Thanet and Chair of the All-Party parliamentary group for Fair Fuel said the news was “absolutely the right decision” and would be “welcomed” by drivers.
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He said: “The continued freeze on fuel duty is absolutely the right decision and one that will be welcomed by hard-pressed motorists and hauliers up and down the country.
“The electorate resoundingly rejects the green lobby’s unpopular policies at repeated elections. The Chancellor is quite right to dismiss their call for an increase in fuel duty too.”
The Treasury has previously claimed the freeze has saved drivers up to £1,200 since it was introduced by George Osborne in 2011.
However, the Government has missed out on billions of pounds of extra revenue from petrol and diesel drivers.
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Conservative MP for Harlow, Rob Halfon said: “The freeze shows that the Government is putting its money where its motor mouth is, that cutting the cost of living isn’t just a slogan but a meaningful pledge from Boris.
“Millions of motorists will breathe a big sigh of relief as the Chancellor has recognised their plight. Well done Rishi and Boris.”
Earlier this week, the Prime Minister said the economic recovery would be powered by “white van men”.
At the weekend, Rishi Sunak also insisted he wanted to “keep tax low for people” despite the current financial crisis.
“Right now, with so many families under financial pressure, this would have been totally the wrong moment to push up their cost of living. We must remain on the side of the motorist.”
FairFuelUK founder Howard Cox added: “Motorists, van drivers and truckers across the UK will be pleased at this protracted decision from the Chancellor.
“They will hope this is just the start of more pro motoring policies, which have been sadly lacking in this Parliament.
“The cost of navigating our roads still remains the highest in the world and drivers continue to be demonised for all environmental ills by mis-informed politicians, but continuing the cap on duty will be warmly welcomed.”