Transporting NZ warns Government's proposed fuel tax increase will be passed on to consumers

There are warnings the Government's proposed fuel tax increase will result in the price of goods going up as transport companies pass on the costs to consumers.

Labour has proposed to increase fuel taxes by four cents per litre every year for the coming three years to help pay for improvements to New Zealand's transport network. 

Each four-cent per litre increase is equivalent to an additional cost per week of 88 cents for the average motorist, according to the Government. By July 2026, when the full 12-cent increase comes in, the additional cost will be $2.64 per week.

But for truck drivers, it is going to cost a whole lot more. 

Transporting NZ interim chief executive Dom Kalasih told AM for a large truck and trailer that drives the faulty Auckland to Wellington return route, they pay around $190,000 annually in road user charges. Adding on the full 12-cent increase, it will equate to an extra $26,000 each year.

These trucks are carrying the goods we buy from grocery items to retail products so when the cost of petrol goes up, so does everything else.

"It has to be passed on [to consumers]," Kalasih said.

"That's going to be seen in all the consumable goods that people rely on for their everyday lives."

Mum of four Ria Apiata said the increase in fuel taxes is concerning considering it will likely drive up the price for everything else.

Appearing on AM, she questioned when the increases will end.

"I am just nervous for what that's going to mean for everyone. Just out regular New Zealanders trying to get by, trying to get involved in our community," Apiata said.

"We are running out of money."

Prime Minister Chris Hipkins said the Government will use the taxes to help pay for 14 key strategic transport projects that will "require work as a priority to reduce congestion, manage emissions, improve safety, grow the economy and open up areas for housing".

While truck drivers will reap the benefits of transport projects, Kalasih is concerned about whether the Government will get the funding to pay for it.

"If that funding doesn't come through then we are not going to get these projects delivered," he said.

Other forms of direct Crown funding, including a new loan, are proposed to bridge the gap in funding from the tax hikes.