Fuel tax rise condemned as 'cruel', 'slap in the face' to motorists

A new fuel tax increase is being condemned as "cruel" and "another slap in the face" to motorists.

From Wednesday motorists will pay an additional 4 cents per litre to fill up, pushing the excise tax alone to just over 70 cents per litre.

It's the third year in a row of fuel tax increases, which are intended to raise funds for improvements to land transport networks.

However Gull pricing analyst Crystal Feist says increasing the fuel tax when most Kiwi households are struggling with the impact of COVID-19 is "a bit cruel".

"The Government committed to these increases in 2018, well before any of the economic unrest caused by the pandemic and seemingly have not reviewed the need for an excise tax increase since," Gull says in a statement.

And National's Transport spokesperson Chris Bishop calls the increase "another slap in the face to motorists".

"Motorists are suffering under this Government. The tax hikes it has passed into law amount to a $1.7 billion tax grab, with Aucklanders the hardest hit because of their regional fuel tax," he says in a statement.

"Motorists deserve a break, particularly given the economic pain caused by the Government's lockdown. Now that light rail is dead, [today's] fuel tax grab shouldn't happen either.

"The fact this tax grab is going ahead is a clear signal that Labour's plan for the next three years will be to repay the massive debt it's taking on with more tax."

The Ministry of Transport has responded to concerns in a Q&A on its website published last month.

"Deferring or cancelling the increase planned for July 1 2020 would reduce the amount of money able to be invested in our land transport network," it says.

"Investing in our transport network will help stimulate the economy and create jobs which will support New Zealand's recovery from COVID-19."