The Government has delayed the scheduled 3p August fuel duty rise for the second time, effectively freezing fuel duty for the rest of the year, Chancellor George Osborne has revealed.

Fuel duty will reactivate on January 1 when it will increase by 3p .

BRC director general Stephen Robertson called the freezing “helpful” for retailers.

He said: “Fuel price rises do double damage. They eat into customers’ budgets, leaving them less money to spend on the things they need and want.

“Retailers themselves have to pay more to get goods to their stores, making it harder for them to keep shop prices down.

“The announcement from the Chancellor that he will freeze duty for the rest of the year is a helpful sign that he is aware of the difficulties businesses are facing at the moment. Quicker action on this would’ve given retailers more certainty in planning for the year ahead but it’s still a move we are extremely pleased to see.”

In the Budget earlier this year, Osborne said he would defer the April 3p rise until August when a 5p fuel duty rise was originally planned.

According to the Treasury the move means prices at the pump will be 10p cheaper than if the Government had not scrapped the pre-existing fuel duty escalator, while hauliers will be £4,900 better off.

Osborne said: “This Government has done more to support motorists than any other. We cut fuel duty last year, and avoided two years’ worth of rises planned by the previous Government.”

The Treasury said it will fill the gap left by the scrapping of the fuel duty rise by reducing spending across departments.

Before the Budget the British Retail Consortium (BRC) had lobbied for the fuel duty rise to be scrapped, arguing that the upward pressure on prices made it harder for British businesses to compete internationally.