Car insurance quote news - Planned increases in fuel tax have been scrapped

Car insurance news - January 3p rise in fuel tax has been cancelled

Drivers who are struggling to afford the rising price of a car insurance quote may be relieved to find out that an increase in fuel tax, planned for January, has been cancelled.

Chancellor George Osborne stated in his autumn statement that the increase of 3p a litre will not come into effect, and a further increase planned for August will be reduced from about 5p to 3p.

Motoring organisations and MPs have recently put pressure on the Government to cancel planned rises in fuel duty amid concerns that many holders of men and women's car insurance will find it difficult to stay on the road.

AA president Edmund King, said, "The chancellor has seen sense on this vital issue. Cash-strapped drivers will heave a heavy duty sigh of relief as current pump prices are close to the record high"

The government did not have to act in the decision as it was approved by MPs without an official vote. Mr Osborne has claimed that following the cancellation of the plans, the average family will be able to save about £144 a year on filling up their tank.

Reports state that Mr Osborne dismissed the annual fuel tax escalator which has consequently cut March's budget for fuel duty by 1p. Many motorists may find that the cancellation of the planned price increases will make it easier for them to afford the price of their car insurance quote.