Budget 2009: Fuel prices set to rise

The chancellor has announced fuel duty will rise by two pence per litre from September.

Speaking at the Budget announcement earlier Mr Darling said after September the price of fuel would rise to one pence a litre above inflation, each April for the next four years.

News earlier this week from the Freight Transport Association (FTA) found previous fuel hikes in recent months had instigated a £533 million bill for businesses.

James Hookham, policy director for FTA, said: "The logistics sector is the lifeblood of the UK economy, and rather than the transfusion we need, Alistair Darling has turned Dracula.

"Insolvency in the logistics sector has doubled in the last year and the number of HGV drivers looking for work has almost quadrupled. What more evidence does the government need that parts of the sector are on their knees?"

However, the increase has been welcomed by environmentalists. Stephen Joseph, executive director of the Campaign for Better Transport, said: "It's right that tax rises should target pollution, but the money raised must be used to invest in alternatives.

"Money from fuel and aviation tax increases should be used to cut public transport fares and invest in improvements - these would help people to green their travel and create jobs now."