Grant Robertson confirms end to fuel tax discount, AA warns of rush on petrol at end of June

  • 21/04/2023
Fuel tax discount to end on June 30
Fuel tax discount to end on June 30 Photo credit: Getty Images / File

The Automobile Association is warning of 'mayhem' at the pumps when the Government's fuel tax discount ends in June.

Finance Minister Grant Robertson confirmed the timing in an interview with Newstalk ZB on Friday morning, saying we "have to move through these emergency measures".

"We've always said that will come to an end and that will come to an end at the end of June," Robertson said.

That will see the price of fuel rise by 25 cents per litre - an increase of around $11.50 to fill a 40-litre tank or $17.25 for a 60-litre tank.

The Government announced the reduction in fuel excise duty (FED) in March last year as fuel prices jumped significantly. Road user charges (RUC) were also discounted, while public transport fares were slashed in half.

The package was only initially scheduled to last three months but it received several extensions.

The latest was in January when Prime Minister Chris Hipkins announced the cost of living would be his top priority.

AA's principal policy advisor for motoring affairs Terry Collins said given the proximity to the election he was surprised the policy wasn't being extended but that it "had to go back on at some time".

He warned petrol stations could run out of fuel in the days leading up to the change.

"We won't be short of fuel, it just won't be in the right place," he said.

"Don't wait for the last two days of June to fill up your car. It's just going to be mayhem."

Collins said the return of the fuel tax meant "the days of $3-a-litre for fuel are here for good", as global oil prices seem to have stabilised around US$85 per barrel in recent months.

Robertson told Newshub ZB that petrol was a "difficult one" but that they had to strike a balance as it works toward balancing a "fiscally careful Budget".

Robertson's office confirmed to Newshub on Friday afternoon that the discount to RUC will also end on June 30.

The half-price public transport fares scheme will end too for most people but is permanent for tertiary students and community service card holders.

The Ministry of Transport estimated the scheme had cost $1.3 billion from March 2022 to January 30 this year, and the extension to June was expected to cost an additional $718 million.

Collins said his plea to the Government is that the money raised by the fuel tax is put back into roading.