Fuel tax hike: How much it might cost you

Monday's petrol tax hike will cost the average motorist less than $1 a week, according to the Automobile Association (AA).

While Labour and NZ First promised no new taxes in their first term, they've exploited the loophole in that wording to increase the existing excise tax on petrol by 3.5c (4c including GST). It'll increase the same amount next year.

Road user charges for diesel vehicles went up 5.5 percent on Monday too, from $59.13 per 1000 kilometres to $62.61 - the same percentage increase that's been put on petrol.

"You might not notice it on a weekly basis when you're filling up, but it's another increase in the price of fuel and it is not going to drop - it's fixed," AA spokesperson Mark Stockdale told NZME.

For most of the country, the AA estimates about half the cost of each litre of petrol is now taxes, including GST and the Emissions Trading Scheme levy. In Auckland, it's more than half. 

Earlier this year BP estimated about 44 percent of the pump price is taxes - higher in Auckland, where there's an extra 10c a litre (11.5c including GST) thanks to the city's regional fuel tax.

But will the excise tax actually increase prices? The current national price for a litre of 91, according to the AA, is $2.21 - a year ago, when taxes were 4c lower, it was actually 4c higher at $2.25. The price at the pump is affected not just by taxes, but the international price of fuel and competition between retailers.

Gull, for example, says it won't be changing its prices to reflect the tax until Wednesday - which might prompt others to keep theirs down too.

The national price was as high as $2.49 as recently as October last year - almost 30c higher than it is now, with no new taxes to blame.

More taxes to come, or none?

National leader Simon Bridges has promised there won't be any more increases to excise tax should National form the next Government, but won't commit to repealing those Labour introduce

"Categorically, we will not be increasing petrol taxes," he told Magic Talk on Monday. "I've made it quite clear we want to reduce taxes, get Government out of people's lives the best we can."

Between 2008 and 2017 National raised petrol taxes six times, usually by 3c - Simon Bridges was Transport Minister for three of those years. They also increased GST from 12.5 to 15 percent. 

"They've had the additional fuel tax, now on the first of July there's another 4c a litre coming on," National transport spokesperson Paul Goldsmith told Newshub. "People are feeling a lot of pain and getting nothing for it."

The AA told NZME the average driver travels about 14,000km a year. If that was travelled in a medium-sized car, it would result in a hike of about $45 a year.

Paul Goldsmith.
Paul Goldsmith. Photo credit: File

The vast majority of the excise tax goes into the National Land Transport Fund. Goldsmith says the increase isn't needed because the Government has "stopped a whole lot of projects".

"The problem is they haven't started any replacements."

The recent Budget poured $1 billion into KiwiRai. The coalition has also refocused transport spending on improving existing roads and public transport

Auckland's regional fuel tax is being spent on upgrading the super city's transport infrastructure. Mayor Phil Goff says so far it's helped fund upgrades to arterial routes, the downtown ferry terminal, cycle, bus and walkways, property purchases to make way for the Mill Rd corridor and road safety improvements. Without the regional fuel tax he says rates would have to go up more than 10 percent, or nothing would get done. 

Analysis last year by Newshub showed that since 1970, Labour and National Governments have increased fuel taxes about the same amount.