The reduction in fuel duty announced in last week's Budget will make it "politically difficult" for news wholesalers to announce further hikes in carriage costs, according to newsagents.

However, retailers and their suppliers, while welcoming the 1p per litre cut in fuel duty, have warned that the cut will do little to reduce their costs.

Chancellor George Osborne also scrapped the fuel duty escalator which adds 1p to fuel duty on top of inflation each year while announcing a fair fuel stabiliser funded by an increased levy on North Sea oil companies.

John Lennon, managing director of the Association of News Retailers, said the move should enable news wholesalers to keep a lid on carriage costs. He added: "Hopefully, this will keep costs down. It will be politically difficult to raise them."

Smiths News said there were no plans to raise charges and it was "business as usual". Menzies was unavailable to comment.

Bedfordshire Nisa retailer Kishor Patel dismissed the move as of no real benefit, "given the cost of petrol has risen about 30p per litre over the past year".

He said the rise in fuel prices had forced some of his suppliers to up their costs, although Nisa had so far been absorbing the costs through improved efficiencies.

Nisa-Today's managing director of central distribution trading & logistics, John Sharpe, warned: "While the budget reduction is very welcome, fuel prices continue to have an adverse effect on the cost of distribution for the whole industry."

However Federation of Wholesale Distributors (FWD) chief executive James Bielby said the measures would "help prevent price increases in the small businesses supplied by FWD members, and therefore encourage consumer spending."

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