The proposed rise in fuel duty this August would have been “small” compared to the reduction in fuel prices recently, according to an energy consultancy firm.

David Hunter, Head of Strategic Partnerships at M&C Energy Group said the Government could have got away with the fuel duty rise.

He told ELN: “The previously proposed 3p hike would have been small relative to recent significant reductions in road fuel prices at the pumps – where the collapsing oil price has led to cuts of around 10p a litre so far with more to follow. Ironically the Government may find it would have been easier to ‘lose’ a fuel duty increase now in the noise of the falling wholesale price, than some future stage where the underlying price may be rising.”

The news comes as Chancellor George Osborne announced the planned 3p per litre rise will be frozen until the end of the year.

Fuel prices in the UK dropped by 4p for the second time earlier this month. The rise is set to come into effect in January next year.