Chancellor Gordon Brown today announced a freeze in fuel duty and a cut of 3p per litre in "green" ultra low sulphur petrol (ULSP) and diesel which he said would be available in every garage next year.

Mr Brown told MPs in his pre-Budget statement today (Wed 8th Nov) in the Commons: "I recognise and I understand the very genuine concerns of motorists and hauliers."

The Chancellor said 1.5p per litre would normally have been added to petrol and diesel from Budget day next year, raising £560 million - which he would now forgo by cancelling the planned increase.

He said the move followed a successful experiment with low sulphur diesel which would now be extended to petrol.

Mr Brown stressed this was part of the Government meeting its environmental obligations, as well as addressing motorists' concerns.

He said he now expected ULSP to make up 100% of the market next year, and after announcing other changes to excise duties said his total package of help to motorists was equivalent to 4p a litre off fuel duty and for hauliers was worth 8p per litre off diesel.

The Chancellor's gamble was that his announcements would be enough to head off another fuel blockade like the one in September which crippled fuel supplies.

He said that overall his changes on fuel and excise duty for cars and lorries would cost £1 billion.