The heartbreaking knock-on effect of the petrol price hike

Record petrol costs are fuelling an increase in the cost of living, with prices rising above $2.40 for the first time and motorists bracing for another hike.

On Monday an excise tax comes into force, adding another 3.5 cents per litre - and drivers say it's now costing over $100 to fill the tank.

"I'm not used to that at all - but you've got to pay it, don't you, if you want to get around," one told Newshub.

And it's having a knock-on effect, with people telling Newshub it's expensive and putting pressure on their cost of living.

"[It's] the reason I came down here: lower socio-economic group areas, the fuel prices are slightly less," another motorist says.

The cost of petrol increased by 10 percent in the year to June, and according to economist Shamubeel Eaqub, that's not the only necessity going up.

"Fuel's absolutely going up, but [so is] the cost of food, the cost of rent, insurance, rates - a lot of things you can't avoid."

In the year to June, housing prices rose 3.9 percent, mortgage interest payments were up 8.1 percent, and rent went up 2.5 percent.

"We must have shelter, we must have transport to work - we can't avoid those things, and those increases in costs mean we're cutting back on other things," says Mr Eaqub.

And as the price of essentials like petrol goes up, the things that have to be cut are the nice-to-haves, the little luxuries, so our quality of life goes down.

Darryl Evans from Mangere Budgeting Services says older people particularly are struggling.

"We've seen a 53 percent increase in the number of pensioners - one pensioner I'm working with, her rent is more than the actual pension."

The rising fuel prices are making things worse.

"Families are telling us they're being hit $15 to $20 a week," says Mr Evans.

"We studied 15 families in April; once they'd paid their rent, once they'd paid the power, once they'd put petrol in the car, they're left with $39 a week."

With another fuel hike on the way, it may be time for Kiwis to ask for a pay rise.

Newshub.