A temporary visa scheme to attract foreign drivers has also been extended.
The army will be deployed to deliver fuel to garages across the country from Monday amid continuing supply issues.
Almost 200 military personnel have been undertaking training at haulier sites to help relieve the situation after more than a week of chaos at petrol stations.
Pumps across the country started running dry last week due to a shortage of specialist HGV drivers to deliver fuel.
The crisis sparked a panic buying frenzy with huge queues building up at forecourts around the country and fights breaking out in some places.
The government have publicly insisted the situation is stabilising but privately have described it as an ‘effing nightmare’, according to reports.
The driver shortage has sown chaos throughout British supply chains, in everything from food to fuel.
In a significant U-turn, a temporary visa scheme for foreign HGV drivers that was due to expire on Christmas Eve will now be extended to the end of February.
Foreign drivers had ridiculed Boris Johnson over the three-month offer, saying they would not leave stable, well-paid jobs abroad to ‘pee in a bottle on the M25’.
The government announced on Friday that 300 fuel drivers will be able to come to the UK from overseas ‘immediately’ under a bespoke scheme which will now be valid until March.
Meanwhile, 4,700 other visas intended for foreign food haulage drivers will be extended beyond the initially announced three months and will last from late October to the end of February.
Ministers said that demand for fuel has stabilised and there is now more being delivered than sold, but that some parts of the country still face challenges.
Defence Secretary Ben Wallace said: ‘Across the weekend over 200 military personnel will have been mobilised as part of Operation Escalin.
‘While the situation is stabilising, our armed forces are there to fill in any critical vacancies and help keep the country on the move by supporting the industry to deliver fuel to forecourts.’
The temporary visa scheme was announced last week as panic buying hit filling stations across the UK, with a shortage of HGV drivers having affected supplies of petrol and diesel.
As well as foreign drivers, 5,500 poultry workers will also be allowed in to help keep supermarket shelves stocked with turkeys before Christmas.
Ministers have said these workers will now be able to stay up to December 31.
But it added that the visas will not be a long-term solution and it wants to see employers make investments in the UK domestic workforce instead of relying on overseas labour.
It said it is also working with industry to find long-term solutions to the shortage of HGV drivers and to encourage more people to enter the logistics by improving pay and conditions.
The UK is said to be grappling with a shortage of around 100,000 lorry drivers caused by a perfect storm of Covid and Brexit.
Business Secretary Kwasi Kwarteng said: ‘Thanks to the immense efforts of industry over the past week, we are seeing continued signs that the situation at the pumps is slowly improving. UK forecourt stock levels are trending up, deliveries of fuel to forecourts are above normal levels, and fuel demand is stabilising.
‘It’s important to stress there is no national shortage of fuel in the UK, and people should continue to buy fuel as normal. The sooner we return to our normal buying habits, the sooner we can return to normal.’
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