Road User Charges system | Ministry of Transport

What you need to know

The road user charges (RUC) system is how New Zealand ensures that road users contribute to the upkeep of the land transport network. It is a distance and weight-based charge that applies to all vehicles not running solely on taxed fuel, and all vehicles weighing over 3.5 tonnes. Vehicles pay RUC based on how far they travel, rather than based on how much fuel they consume.

The revenue collected goes into the National Land Transport Fund, which pays for road maintenance, road improvements, public transport and road safety.

Decision to transition all vehicles to the RUC system

Government has decided that all vehicles will be transitioned to the RUC system. This will ensure that all road users contribute fairly to the upkeep of our roads, regardless of what vehicle they drive. The transition will progress in three phases:

In 2026, make legislative and operational improvements to modernise the RUC system. This will enable a fair, competitive retail market to develop – with the goal of making it easy and cost-effective for vehicle owners to pay for their road usage.
In 2027 the new RUC system will be open for business. Private providers will be able to offer a wide range of solutions for owners of vehicles that have to pay for road usage (diesel, heavy and electric vehicles).
Beyond 2027, all petrol vehicles will be brought into the RUC system. Further legislative changes may be needed to refine the system and ensure a smooth transition for owners of petrol vehicles.

Click on 'More information' below for relevant proactive releases and FAQs.

The work to date

Aug 2025–Present

Improving the road user charges system for the introduction of petrol vehicles

On 6 August 2025, at the Building Nations 2025 conference, the Minister of Transport announced the next steps to transition New Zealand's light petrol vehicle fleet from fuel excise duty (FED) to road user charges (RUC).

The immediate next step is to reform the Road User Charges Act 2012 and its regulations. These changes will enable the private sector to offer different technological solutions to make it easier for users to pay for RUC. The relevant Cabinet papers that relate to this work are available below. 

The Ministry of Transport will soon lead a further market engagement process to identify how the Government can best support the development of new RUC services for the light vehicle fleet. Contact ruc@transport.govt.nz to register your interest.

A bill to give effect to Cabinet's agreed changes is currently being drafted. A further update will be provided once the bill is introduced to the House of Representatives. It will be referred to Select Committee for public input.

Jul 2025

RUC exemption for heavy electric vehicles extended until 1 July 2027

More information

The Government has extended the RUC exemption for heavy electric vehicles until 1 July 2027 (the exemption was previously set to end after 31 December 2025). Heavy vehicles are classed as those weighing over 3.5 tonnes, such as trucks and buses powered by an external source of electricity.

This extension gives heavy electric vehicle owners and operators time to plan for transition to RUC, while setting a clear direction that all vehicles need to contribute to the costs of maintaining the road network.

Heavy electric vehicle owners have been exempt from paying RUC since 2017. From 1 July 2027, owners of heavy electric vehicles will need to buy a RUC distance licence. 

May 2025

Request for Information — Road User Charges Retail Services

More information

On 15 November 2024, the Ministry of Transport initiated a market sounding exercise to gauge the private sector's interest in providing services for road users to purchase and manage their road user charges (RUC) obligations. The market sounding was in the context of the Government's commitment to transition the light petrol vehicle fleet to RUC.

The Ministry received 25 responses to a request for information (RFI) and met with an additional three parties who did not submit a formal response. Respondents included current electronic RUC (eRUC) providers, over-the-counter retailers, overseas telematics providers, technology companies, and fuel retailers.

Parties showed strong interest and outlined a range of technology solutions, including the use of in-vehicle telematics devices for distance measurement. Some outlined potential mobile apps for manual input, odometer photographs. There was also interest in point-of-sale machines and apps at fuel pumps.

Some respondents proposed bundling RUC sales with other vehicle-related services. For those requiring a significant capital investment, their interest was conditional on a sufficient customer base to ensure a return on investment. Some expressed interest in charging a direct administration fee to customers instead of receiving a commission from the NZ Transport Agency (NZTA).

Almost all respondents expressed the view that the Government should remove the requirement for physical RUC labels (the carry and display requirement) on vehicles to enable innovation and broader market participation. Respondents also commented on NZTA's role, expressing a desire for easier system connections and lower data-checking fees. They also view NZTA's dual function as a retailer and regulator as anti-competitive and a potential barrier to market participation.

The Ministry engaged with the following parties: AA New Zealand, Austroads TCA, Be-Mobile NV, Bonnett Limited, Carma Technology Corporation, Caura Limited, ClearRoad Inc., Compass IoT Pty Limited, eConsultants Limited, Emovis, EROAD Ltd, Fast NZ Limited, IntelliTrac New Zealand Limited, Invenco Limited, Kapsch TrafficCom New Zealand Ltd, Kora New Zealand Limited, Navman Wireless Limited, New Zealand Post Limited, Nuonic Pty Limited, Optimal Fleet Solutions Limited, Picobyte Solutions Limited, Power Trip Limited, RUConnected Limited, Smartrak Limited, V-DAQ, Vehicle Testing New Zealand Limited, Waitomo Group Limited, and Z Energy Limited.

Jan 2024

RUC exemption ends for light electric vehicles

More information and related documents

The Government has announced that light electric vehicle (EV) and plug-in hybrid vehicle owners will begin paying road user charges (RUC) after the current exemption expires on 31 March 2024. The exemption for EV owners, in place since 2009, was designed to end once EVs reached approximately 2 percent of New Zealand's light vehicle fleet. This milestone has now been met.

To account for fuel excise duty already paid by plug-in hybrid owners, the Government has set a reduced RUC rate for these vehicles.

Starting 1 April 2024, owners of light EVs and plug-in hybrids under 3.5 tonnes must purchase a RUC licence and display it on their windscreen. A two-month transition period will allow owners to register in the RUC system without penalty for unpaid charges.

Read the Minister of Transport’s media release(external link).

Feb 2023

Ending reduced rates of road user charges

More information

Jan 2022–Apr 2023

'Driving Change' consultation on the road user charges system

More information

The Ministry of Transport released a discussion document for public consultation called "Driving Change: Reviewing the Road User Charges System".

The document outlines several proposals, including changes to the factors considered when setting RUC rates to account for greenhouse gas emissions, noise pollution, and congestion.

It also set out proposals to bring light electric vehicles (EVs) into the RUC system and other changes to improve compliance.

The consultation period for the document closed in April 2022.

Relevant documents:

Apr 2022–Jul 2022

Road user charges reduced between 21 April 2022 and 21 July 2022

More information

Jul 2021

Road user charges exemption for light electric vehicles extended until 31 March 2024

More information

Aug 2013–Dec 2016

Evaluations of the Road User Charges Act 2012

More information and related documents

Between 2013 and 2016, Allen & Clarke conducted a three-stage evaluation of the Road User Charges Act 2012 following its major reform.

2013 evaluation

The first evaluation report of the Road User Charges 2012. The report assesses the effectiveness of the reform against its stated objectives of efficiency, equity, integrity, and cost recovery, and to inform any necessary adjustments. The report details the methodology used, including document reviews, data analysis, interviews, surveys, and case studies, before presenting its key findings on various aspects such as operator understanding, compliance costs, revenue neutrality, and evasion.

The evaluation found that the changes successfully simplified the system, leading to less evasion, and that it had more integrity and was seen as fairer by operators and the government. It also determined that the new system was broadly revenue-neutral and that the binding assessment process had increased efficiency. The evaluation found that some owners had limited knowledge of the system and would exceed their license limits. It confirmed that checking RUC compliance during the Warrant of Fitness test helps to ensure the integrity of the system.

2014 evaluation

The second report assesses the medium-term impacts of the Road User Charges Act 2012 changes on transport operators and the government, nearly two years after implementation. The report examines various aspects, including the effects on light diesel vehicles, the uptake of High Productivity Motor Vehicle (HPMV) permits, operator compliance costs, and the efficiency of electronic RUC (eRUC) systems and enforcement processes.

The second evaluation identified several key strengths and weaknesses in its operation. The reform has generally simplified RUC for transport operators, leading to fewer opportunities for evasion and making the recovery of unpaid charges easier. Operators have responded positively to the new system, with many showing satisfaction and not wanting to return to the previous system. Significant efficiency gains have been observed with the use of High Productivity Motor Vehicle (HPMV) permits and electronic RUC (eRUC) systems. The evaluation also found that the new system has significantly reduced weight-based evasion.

Dissatisfaction was expressed among HPMV permit holders with the requirement to pay RUC based on their maximum permit weight rather than their actual load. Additionally, owners of light diesel vehicles often had limited knowledge of the RUC system, leading to high rates of distance overrun. The review noted that manual administrative processes also remain time-consuming for both the NZTA and road user (specifically, RUC licence type changes and off-road refund applications)

2016 evaluation

This Cycle Three Evaluation Report, in December 2016, assesses the effectiveness of the 2012 reforms. The evaluation found that the Act was generally effective as a legislative basis for the system, with many of its processes, such as automatic invoicing through WoF/CoF inspections, working well. It also noted that the market-driven uptake of electronic RUC (eRUC) systems had been effective, with eRUC comprising a significant and growing portion of total RUC revenue. The evaluation also found that while RUC debt recovery was a challenge.

The review found that the cost of eRUC systems remained a barrier for smaller operators, and misconceptions about continuous electronic licence display requirements limited innovation. A continued finding was the poor understanding of RUC among light diesel vehicle owners, leading to distance overruns.

Aug 2012

Road User Charges Act 2012 came into force

More information and related documents

The Act came into force on 1 August 2012, introducing significant changes, including:

the Act defined a RUC vehicle to include heavy RUC vehicles (gross vehicle mass over 3,500 kg) and light RUC vehicles (gross vehicle mass of 3,500 kg or less, with motive power not derived wholly from petrol). It also established RUC vehicle types and RUC weights, which are either the vehicle's gross vehicle mass (GVM) or its maximum allowable mass under the VDAM Rule. This created a permanent RUC weight for each vehicle, eliminating the previous operator-nominated weight and time-based licence system.
a framework for the electronic management of RUC. It allows for the approval of electronic system providers to supply electronic distance recorders and issue electronic licences.
restructured offences and penalties into distinct categories with specific fines for individuals and body corporates. It updated existing offences related to distance recorders and licences. It introduced new provisions to ensure fairer outcomes, particularly for light diesel vehicles.
a clear process for the RUC collector to issue assessments for unpaid RUC and for individuals to appeal those assessments. The appeal process includes formal reviews and appeals to the District Court, High Court, and Supreme Court. This differed from the 1977 Act, where a District Court Judge held an inquiry and made assessments based on that inquiry.
simplified the list of exempt vehicles and introduced new provisions for exemptions and refunds. It allows for exemptions for vehicles unsuitable for regular road use, which can be granted through an Order in Council or by a notice from the RUC collector.

Road User Charges Act 2012 (legislation.govt.nz)(external link)

Since the Act came into force, regulations covering exemptions, RUC rates, infringements and other aspects have passed into law.

RUC regulations (legislation.govt.nz)(external link)

Aug 2008–May 2009

Independent review of the road user charges system

More information and related documents

In August 2008, an independent review of New Zealand's Road User Charges (RUC) system began The RUC system has been in place since 1978 to recover costs for road network maintenance and improvement. The review aimed to ensure the system for allocating roading costs was fair and efficient. The review explored various alternative charging mechanisms, including:

a simplified RUC system
a diesel excise duty with additional RUC for heavy vehicles
a diesel excise duty with differentiated motor vehicle registration fees
a fully electronic RUC system

The review also examined the engineering and economic principles underpinning road cost allocation, the impact of vehicle characteristics on road wear, and international examples of road charging technologies and models.

The scope also included evaluating the Ministry of Transport's Cost Allocation Model (CAM), analysing the costs and efficiency of the existing RUC system, and recommending how to review and adjust charges in the future.

The review concluded in March 2009 with a final report to the Minister of Transport, which ultimately led to the drafting of the Road User Charges Act 2012. Throughout the review, there was consultation with stakeholders, and the review commissioned several independent expert reports to inform its recommendations.

Road user charges review released (beehive.govt.nz)(external link)

The review led to the enactment of the Road User Charges Act 2012, which was introduced into Parliament on 25 November 2010.

Get in touch

RUC@transport.govt.nz

Related work

Work programme

Your browser is out-of-date!

What you need to know

Improving the road user charges system for the introduction of petrol vehicles

RUC exemption for heavy electric vehicles extended until 1 July 2027

Request for Information — Road User Charges Retail Services

RUC exemption ends for light electric vehicles

Ending reduced rates of road user charges

'Driving Change' consultation on the road user charges system

Road user charges reduced between 21 April 2022 and 21 July 2022

Road user charges exemption for light electric vehicles extended until 31 March 2024

Evaluations of the Road User Charges Act 2012

Road User Charges Act 2012 came into force

Independent review of the road user charges system

Get in touch

Related work