Fuel duty will be frozen for the sixth year in a row, Mr Osborne said.
He said it would result in a saving of £75 a year for the average driver.
Beer, cider, whisky and other spirits duty will also be frozen but others will rise by inflation.
The lower growth forecast for the economy means the Chancellor will have to raise taxes or make drastic cuts, the economic think-tank said.
The Budget seems to be a return to 'nudge, nudge' politics which looks at behaviour, the cost of dealing with it, and makes a calculation.
Around 20 Tory backbenchers wrote to the Chancellor, even before the Budget was delivered, to outline their concerns about the measure.