Chancellor Alistair Darling has confirmed he will implement the 2p per litre increase in fuel duty that was postponed from April due to sharp rises in fuel costs.

The increased pump price will be active from 1 December, and will be followed by increases of 1.84p per litre from 1 April 2009 and 0.5p per litre above indexation in April 2010.

The Chancellor defended his decision to increase fuel duty by pointing to the drop in pump prices since the summer.

The move will help to offset the the 2.5% cut in VAT also announced during the Pre-Budget Report.