The Chancellor's fuel cut gamble appears to be backfiring with the average price of petrol already higher than before the Budget, according to the RAC.

It has only been two weeks since George Osborne announced the 1p fuel duty cut with a flourish at the end of his Budget statement in the House of Commons.

"The volatile oil market has meant that drivers have seen very little benefit from the duty cut. Prices are continuing to spiral upwards with no end in sight to the high prices," said RAC motoring strategist Adrian Tink.

According to calculations by the Daily Mirror, motorists have only benefitted by 27p since the Budget, while the AA reckons that since last year alone the average tank of petrol has gone up by £7.

The grand gesture has come at a big cost for the Chancellor, however. The 1p cut has lost the Treasury £2bn, and the attempt made to recoup that by taxing North Sea oil producers more heavily has robbed him of some of his political credibility.

AA public affairs head Paul Watters said: "The Government's delay of the fuel duty increase prevented thousands of poorer drivers from being tipped into road fuel poverty and the 1p cut in duty was very welcome.

"However, the Chancellor must feel like King Canute trying to stop a tide of rising fuel prices that threaten to swamp family budgets, business survival and economic recovery."