Fuel duty has been frozen for the seventh consecutive year, chancellor Philip Hammond announced in today's Autumn Statement.
"It is a tax cut worth £850m next year and means the current fuel duty freeze is the longest for 40 years," Hammond said.
The duty cancellation will save the average car driver £130 a year and the average van driver £350 a year, he said.
The chancellor was widely expected to scrap a planned 2p-per-litre rise in fuel duty that was due to be enforced in April next year.
Hammond pointed towards "significant pressure" on prices at the pumps in a rising oil price environment, which has also been put under pressure by a fall in sterling.
RAC spokesman Simon Williams said:
The chancellor’s commitment to freeze fuel duty will be greeted with relief by motorists and businesses at a time when we know drivers are concerned that fuel prices will rise significantly over the next six months – which might be the case if oil-producing countries that are members of Opec commit to an oil production cut when they meet this time next week.
The AA said the chancellor had "created the illusion of being the motorists' friend" with the freeze on fuel duty, but was "pickpocketing" drivers with a further hike in Insurance Premium Tax.
Neil Bishop, chairman at the UK's largest family-owned removals company Bishop's Move, said the freeze will be a "welcome relief" for industries that rely on the roads to operate.
In the run-up to the Autumn Statement, campaigners and a group of 50 Tory MPs had called on the government to go further than a freeze and cut the duty by 3p a litre.
Quentin Wilson, a broadcaster and a lead campaigner at FairFuelUK said: "I’m disappointed that the chancellor didn’t instantly put money into everyone’s pockets by cutting duty.
"There’s an immediate benefit to the economy. I’m surprised too given the CEBR has said cutting duty by 3p wouldn’t change net tax receipts. This is a lost opportunity from a government still afraid of supporting drivers and roads."