Motorists will pay £2 billion more next year after the Chancellor announced the highest increase in fuel duty for eight years and raised road tax on gas guzzlers by a record 40 per cent.

The 2p-a-litre rise in fuel duty was deferred for six months, allowing Gordon Brown to avoid the risk of a repetition of the petrol protests of 2000 until after he is expected to become Prime Minister.

However, the deferral means that there will be two rises in six months, with the 2p rise on October 1 followed by a further 2p increase on April 1 next year.

The AA said that the rises, together with a predicted increase in the oil price, would result in £1 a litre becoming the normal price at the pumps.

Mr Brown said that there would be a further 1.8p-a-litre rise in fuel duty on April 1, 2009. If inflation remains at 2.8 per cent, this would mean fuel duty rising above inflation for three consecutive years.

A Treasury spokesman said that the total collected in fuel duty would rise by £1.5 billion to £25.1 billion next year.

The sum raised in vehicle excise duty, known as road tax, would increase by £500 million to £5.6 billion, he said.

From today, the owners of the 175,000 cars registered since March 23 last year that emit 225g of carbon dioxide or more per kilometre (g/km), will pay £300 when renewing their annual tax disc. From April next year, they will pay £400.

The majority of motorists will pay £15 more for their tax discs from today, with £5 increases in April 2008 and April 2009.

Mr Brown said that reductions in air pollution from diesel engines had persuaded him to equalise the rates paid by diesel and petrol cars. Until today, diesel cars had paid £10 more per year than petrol cars.

However, he failed to mention that he was removing the difference by raising the petrol rate to the diesel rate, as well as adding £5 to both rates.

The road tax rate for the 300,000 cars — or 1 per cent of the total — in Band B (101120g/ km) decreases to £35 today. Mr Brown described this as a 30 per cent cut, but most Band B cars are diesel and were paying £40, meaning the cut for them will be only 12.5 per cent.

Mr Brown also claimed that he was raising the top rate by 30 per cent, but the increase is 40 per cent for diesel cars in Band G and 43 per cent for petrol vehicles. A Treasury spokesman admitted that the 30 per cent figure was misleading, saying: “I agree it’s odd. It’s the kind of thing that appears in Budget speeches.”

The Freight Transport Association said that Mr Brown had abandoned a policy of taking account of world oil prices when setting fuel duty. “He is saying that he is raising duty regardless of the oil price, which could mean very punishing increases in the cost of fuel,” it said.

The AA said that Britain already had Europe’s highest fuel taxes and would extend its lead. Paul Watters, the AA roads policy head, said: “The six-month deferral of the 2p rise is a political manoeuvre by Brown to insulate him from the potential for protests until after he becomes Prime Minister. If oil prices rise again, the successive 2p increases could mean £1-a-litre becoming the norm.” Mr Brown said his objective “beyond 2012” was to cut emissions from the average new car from 167g/km to 100g/km.

The Chancellor announced a review of the vehicle and fuel technologies needed to “decarbonise road transport” over the next 25 years. The review will be led by Professor Julia King, vice-chancellor of Aston University, who will work with Sir Nicholas Stern, author of the recent government report on climate change.

Mr Brown unveiled a tax incentive for company car drivers to switch to vehicles that run on 85 per cent bioethanol made from plants. He also proposed to end an employee car ownership scheme loophole that lets drivers avoid higher company car tax on gas guzzlers.

The Chancellor rejected imposing VAT on domestic airline tickets, saying there would be little environmental benefit. However, he signalled change in air passenger duty to lower the rate paid by premium economy passengers and increase it for business-class-only flights, on which passengers pay at the economy class rate.

The best and the worst: how green is your car?

Cars most affected by Budget announcement on road tax changes
The amount payable by cars in Band G, which covers those emitting 225g of CO2 per km or more, increases to £300 today and £400 next April
BMW X5 3L petrol 307g/km
Land Rover Discovery 2.7L diesel 249g/km
Renault Espace 2.0 petrol 232g/km

Road tax on fuel-efficient cars in band B, covering those which emit 101-120g of CO2 per km, falls to £35 today and remains frozen at that level for the next three years
Peugeot 107 109g/km
Citroen C2 1.4L diesel 108g/km
Fiat Panda 1.3L diesel 114g/km

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