Chancellor George Osborne has announced in his Autumn Statement that fuel duty will remain frozen until the end of the current parliament in May 2015.
The tariff will remain at 57.95 pence per litre, the level it has been at since 2011 and Osborne has ruled out a return of the fuel price escalator, which would have pushed fuel prices higher.
There was speculation that the escalator could return because oil prices have fallen in recent months but Osborne said: "Despite falling fuel prices let me make this clear: we've cut fuel duty and we will keep it frozen.”
The RAC welcomed the chancellor’s stance.
"The negative impact of fuel duty on economic growth is now acknowledged by the Treasury," said David Bizley, chief engineer at the RAC.
Last month Osborne said he expected the price of fuel at the pumps to decrease following a fall in the price of oil.
The price of oil fell from $115 (£72) per barrel in June to $84 (£52) in November, while fuel has fallen by more than 8p per litre since the summer.
The chancellor called for fuel companies to reduce the price for customers.
"Our message is clear - the oil price has fallen and we expect that to be passed on to people at the petrol station filling up," said Osborne.
According to motoring organisation the AA, two-thirds of the cost of fuel is accounted for by a combination of VAT at 20% and fuel duty.