Chancellor Alistair Darling is delaying a fuel duty rise planned for October for at least another six months, the Treasury said on Wednesday.
The fuel duty was set to rise by 2 pence per litre on Oct, 1, a hike that had already been deferred from April. Darling has come under intense pressure to scrap the increase in the face of record high oil prices.
"The global credit crunch and sharp rise in world oil prices have pushed up prices at the pump," Darling said in a statement.
"Today's decision will help motorists and businesses get through what is a difficult time for everyone."
The government has also come under pressure to scrap proposals for increases in vehicle excise duty for more heavily polluting cars.
A Treasury spokesperson said policy on that issue had not been changed.
