As well as freezing duty on petrol and diesel, the Chancellor also froze duty on liquefied petroleum gas (LPG) and compressed natural gas (CNG).
Brown said: 'As I said in the 2000 pre-Budget report, I would respond to rises in oil prices. Given the high and volatile oil price I have decided to freeze fuel duties this year.' The move was welcomed across the motor industry.
Alan Pulham, franchised dealers director of the Retail Motoring Industry Federation (RMI) said: 'We are delighted that the Chancellor has not milked motorists and the motor industry.'
And Jon Walden, managing director of Lex Vehicle Leasing, said: 'With the volatility of oil prices, it was important the Chancellor brought some much-needed stability to fuel duty.'
Danny Clenaghan, managing director of ARVAL PHH Business Solutions, said it was 'business as usual for fleets' in terms of fuel.
'The freeze on fuel didn't come as a great shock,' he said, 'It was interesting that the Chancellor plans to encourage more environmentally friendly fuels - but the devil is in the detail. We need to study it closely to see where we can help our fleet customers who want to investigate using environmentally friendly vehicles.'
Despite the freeze on fuel duties, UK motorists, including fleets, still pay the highest pump prices in Europe – and are taxed the most on a litre of fuel.
Figures produced by the European Commission Oil Bulletin show the price of a litre of unleaded fuel in the UK averaged 69.27p in mid-December last year, while the price in Finland was just 41.35p. For one litre of fuel, UK motorists pay 81% in tax – the highest in Europe – while the Finnish, the cheapest country for fuel, pay just 60%.
Brown also used the Budget to pledge the Government's commitment to encouraging the production and use of sulphur-free fuels.
He said: 'I will, from next year, introduce a fuel duty incentive for sulphur-free fuel. Having already cut fuel duty for projects on hydrogen, bio-gas and methanol fuels, I am now inviting British business to come forward with further proposals for pilots that would encourage new fuels and which we would support with fuel duty cuts and exemptions.'
The duty incentive on sulphur-free fuels will come into effect from 2003.