Tesco, Sainsbury's and Asda Cut Fuel Prices
Reuters

Chancellor George Osborne confirmed that the government will freeze fuel duty amid tumbling oil prices.

UK fuel duty is currently 58p per litre for petrol and diesel.

As part of his Autumn Statement announcement, Osborne also said that Whitehall will force airlines to separate how much they spend on jet fuel on economy flights, so consumers can see how much of their fare goes on fuel.

Last month, Britain's government pledged to urge energy firms to lower petrol prices as the price of oil has fallen from around $115 per barrel (bbl) in June to the $84/bbl, which was the price at the time of the comment.

Oil prices have now fallen below the $65/bbl mark as of 3 December.

Chief Secretary to the Treasury Danny Alexander said that the recent fall in petrol prices is not enough as fuel costs were only lowered by 6% to around 124.22p, from 131.70p, despite oil falling by around 25% during that period.

According to the campaign group FairFuelUK's ComRes poll, 80% say their cars and vans are essential to their lives yet 30% still can't afford to drive where they need to.

The group says it has one million people supporting an oil and pump pricing inquiry and a minimum 3p cut in duty.

"I'd hate to think all this tough-talking to the oil companies is a smokescreen to hide the real issue that at the pumps it's the Government that takes the most," said Quentin Willson FairFuelUK's Campaigner.

"Trying to deflect attention away from our calls for a 3p duty cut in the Autumn Statement would be unforgivable. Wouldn't it?'.

Meanwhile, Tesco, Sainsbury's and Asda all upped the ante in the supermarket price war as the trio declared cuts on the price of petrol and diesel two months' ago.

Both Sainsbury's and Tesco have said that they will drop the price by up to five pence per litre, while Asda more modestly decided to reduce petrol costs by one pence per litre and diesel by two pence.