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27 January 2011
Last updated at 10:43 ET
Chancellor George Osborne has said he is considering cancelling the fuel duty increase due to take effect in April.
There is growing pressure to have a rethink on the 1p-a-litre rise at a time when petrol prices have soared after oil price and VAT increases.
He told BBC WM: "We can override it. We are looking at that."
Mr Osborne added that the Budget was taking place on 23 March, "so if we are able to do something about it we will do it before April".
The government has come under pressure from motorists to scrap the rise, as the cost of a litre of unleaded has risen to almost £1.30 because of high global oil prices and this month's VAT hike to 20%.
'Expensive' Fuel duty already costs 58.95p for every litre.
Labour chancellor Alistair Darling announced a further 1p rise for this April in last year's Budget. The 1p rise comes on top of another increase of 0.76% a litre imposed on 1 January.
Mr Osborne said he was also looking at the idea of a fuel stabiliser, so "the government steps in to try to protect people from the effects" of petrol price rises by cutting the level of duty.
When asked later about the possibility of scrapping the proposed increase in fuel duty, Business Secretary Vince Cable told Westminster journalists: "Any attempt to change the duty regime is expensive... but if he (Mr Osborne) says he's looking at it, then he's looking at it."
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There is growing pressure to have a rethink on the 1p-a-litre rise at a time when petrol prices have soared after oil price and VAT increases.
He told BBC WM: "We can override it. We are looking at that."
Mr Osborne added that the Budget was taking place on 23 March, "so if we are able to do something about it we will do it before April".
The government has come under pressure from motorists to scrap the rise, as the cost of a litre of unleaded has risen to almost £1.30 because of high global oil prices and this month's VAT hike to 20%.
'Expensive' Fuel duty already costs 58.95p for every litre.
Labour chancellor Alistair Darling announced a further 1p rise for this April in last year's Budget. The 1p rise comes on top of another increase of 0.76% a litre imposed on 1 January.
Mr Osborne said he was also looking at the idea of a fuel stabiliser, so "the government steps in to try to protect people from the effects" of petrol price rises by cutting the level of duty.
When asked later about the possibility of scrapping the proposed increase in fuel duty, Business Secretary Vince Cable told Westminster journalists: "Any attempt to change the duty regime is expensive... but if he (Mr Osborne) says he's looking at it, then he's looking at it."
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