The New Zealand Government will delay planned NZ$0.12/litre petrol excise and road user charge hikes set to take effect in January 2027 by one year to limit fuel cost increases.
The Government plans to lift its petrol excise rate by NZ$0.15/litre – and its road user charge rates by equivalent amounts – over 2028 because of the delay, Infrastructure Minister Chris Bishop said on 31 August. It had previously planned to raise its petrol excise and road user charge rates by NZ$0.12/litre on 1 January 2027.
“Cancelling next year’s fuel excise increase and spreading the change over time from 2028 will give Kiwis more time to recover from the period of post-Covid economic pain and recent uncertainty in the Middle East,” Finance Minister Nicola Willis said.
New Zealand motorists driving diesel, hybrid, and electric vehicles pay road user charges in 1000-kilometre increments, while petrol vehicle drivers pay an excise each time they re-fuel. The country’s petrol excise and road user charge rates have remained at NZ$0.70/litre and NZ$38 – NZ$76 per 1000 kilometres, respectively, since 2023.
New Zealand’s road user charge and petrol excise schemes support the National Land Transport Fund (NLTF), a ring-fenced pool of transport infrastructure funding. The New Zealand Transport Authority Waka Kotahi uses the NLTF to build and maintain roads, cycleways, and walkways.
The Government expects its delayed road user charge and petrol excise hikes to reduce NLTF funding by NZ$1.45 billion, Bishop said. But it will fully cover the NLTF’s revenue shortfall through general taxation and by reallocating NZ$450 million of fuel contingency funding, Willis said.
The Government’s decision to delay its road user charge and petrol excise hikes comes alongside elevated fuel prices.
Unleaded 91 octane petrol and diesel prices averaged NZ$3.01/litre and NZ$2.70/litre, respectively, across New Zealand on 1 September, data from the Ministry of Transport (MoT) and price monitor Gaspy show. New Zealand petrol and diesel prices averaged NZ$2.66/litre and NZ$1.87/litre, respectively, on 27 February, immediately before the US-Israeli war in Iran began, MoT data show.
By Avinash Govind