Chancellor backs down on fuel-duty increase

The fuel-duty increase planned for September has been postponed for at least two months, the Treasury said yesterday. Chancellor Gordon Brown is to review his decision in the pre-Budget report, expected in November, a Treasury spokesman said.

The fuel-duty increase planned for September has been postponed for at least two months, the Treasury said yesterday. Chancellor Gordon Brown is to review his decision in the pre-Budget report, expected in November, a Treasury spokesman said.

The move, expected to cost the Treasury £125m, follows criticism from the transport lobby and Tories that the 1.42p duty rise, coupled with high fuel prices, would hit drivers unfairly. The Chancellor proposed the duty rise in this year's Budget but motorists and hauliers threatened protests - similar to those four years ago when vehicle blockades nearly brought the UK to a standstill - unless the increase was cancelled.

After world oil prices soared to a 13-year record, forcing UK petrol prices to break the 80p a litre level, Mr Brown announced on 3 June that he would review the duty rise.

In a written Parliamentary statement, John Healey, economic secretary to the Treasury, said: "The Government's focus since June 3 has been on Opec and oil producers and their responsibilities to meet their own targets on sustainable oil prices and we have sought to await the outcome of this month's Opec ministers' meeting before making a further statement.

"With the next meeting of Opec ministers now moved from July to September, and in the light of the continuing uncertainty in the oil market, we have decided to keep the planned increase, including for sulphur-free fuel and rebated fuels, under review, and will report back further at the time of the pre-Budget report."

He added: "Because of its environmental benefits, the Government remains committed to the introduction of sulphur-free fuel and will be in discussion with the industry over its availability across the country."

Friends of the Earth said yesterday's decision showed "there is no joined-up environmental thinking at the heart of government". A spokesman said: "We are very disappointed the Chancellor has chosen to retreat in the face of opposition to this important policy decision, especially on the day when the transport White Paper confirms that fuel prices are one of the most effective means of limiting the environmental impact of transport growth."