Te pāpātanga o te tāke penehīni me ngā utu mō ngā kaiwhakamahi rori Rates of petrol excise duty and road user charges

On 1 July 2020, PED increased 3.5 cents per litre and RUC was increased by 5.3%.

From 1 July 2020, the rate of PED is 70.024 cents per litre and the cost of a RUC distance licence for a light vehicle — for example, a car, van or ute — is NZD$76 per 1000km, including GST.

Road User Charges (Rates) Amendment Regulations 2020(external link) 

Road User Charges Amendment Regulations 2020(external link)

We prepared a regulatory impact assessment (RIA) on the increase to RUC. The increase to PED for 2020 was legislated in 2019 as part of budget legislation — the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Act 2019.

Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Act 2019(external link)

Increasing PED and RUC following COVID-19

Cabinet considered potentially deferring or cancelling the increase to PED and RUC given the impacts of COVID-19 the community. Deferring or cancelling the planned increase would have permanently reduced the amount of money able to be invested in our land transport network. Investing in our transport network helps to stimulate the economy and create jobs which will support New Zealand's recovery from COVID-19. The Government has ruled out any further increases in PED and RUC for the next 3 years.

All the revenue from PED and RUC funds the improvement, operation and maintenance of our land transport network. In addition to transport projects funded by PED and RUC, the Government is funding several transport projects through the New Zealand Upgrade Programme.

New Zealand Upgrade Programme – Transport(external link)

Crown Infrastructure Partners is reviewing ‘shovel-ready’ projects, to help stimulate the economy and support our COVID-19 recovery. 

Shovel-ready projects(external link)

Projects to be funded by the increases

In the coming years, the amount of money available for investment in our land transport network will come under increased pressure. In addition to the Government’s road maintenance programme, funding is needed for:

• existing commitments including the 25-year public-private partnerships (PPP) contracts relating to 2 large roading projects, and
• other major roading projects including the new route replacing the Manawatū Gorge road, and the Mt Messenger bypass.

Cost to households and businesses

The cost varies depending on:

• how many kilometres they travel
• the number of vehicles they own, and
• the fuel consumption of the vehicles.

For example, a household with 1 vehicle that travels the average number of kilometres in a year — about 11,500 — will pay in 2020/21 between NZD$35 and $40 extra a year, or 67 to 76 cents additional each week.

On 1 July 2019, PED increased by 3.5 cents per litre and RUC increased by about 5.5%.

From 1 July 2020, the rate of PED was 66.524 cents per litre and the cost of a RUC distance licence for a light vehicle — for example, a car, van or ute — was NZD$72 per 1000km, including GST.

We prepared an RIA that informed Cabinet’s decision. The Road User Charges (Rates) Regulation was amended in May 2019 to put in place the increased rates.

Road User Charges (Rates) Amendment Regulations 2019(external link)

The increase to PED for 2019 became law under the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Act 2019. The increase to PED on 1 July 2020 was also legislated at this time. 

Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Act 2019(external link)

PED increased by 3.5 cents per litre on 30 September 2018 and RUC increased by around 9.7% on 1 October 2018.

From 30 September 2018 the rate of PED was 63.024 cents per litre and, from 1 October 2018, the cost of a RUC distance licence for a light vehicle — for example, a car, van or ute — was NZD$68 per 1000km, including GST.

Excise and Excise-equivalent Duties Table (Motor Spirits) Amendment Order 2018(external link)

Road User Charges (Rates) Amendment Regulations 2018(external link)

How the increases affected RUC

The exact increases to RUC varied depending on the size, weight and axle configuration of a vehicle:

• RUC for light diesel vehicles, up to 3.5 tonnes, increased by around 9.7 %. For example, it cost about NZD$50 more to drive a diesel car 10,000km — that is, 0.5 cents more per kilometre.
• Most small and medium-heavy vehicles of more than 3.5 tonnes and up to 12 tonnes had increases of between zero and 10%.
• Most heavy vehicles did not pay more because the current RUC were at an appropriate level, although RUC for some increased by up to 10%.

On 28 June 2018, the Government announced increases in PED and RUC over 3 years. They came into effect on 30 September 2018, 1 July 2019 and 1 July 2020.

Before the increases were announced, we engaged with the public on the draft GPS on Land Transport 2018. We wanted to find out what stakeholders thought of PED increases of between 3 and 4 cents per litre, with equivalent increases to the rates of RUC, across 3 years. We also prepared an RIA.

Government Policy Statement on Land Transport 2018

Forecasts showed that 3 annual increases of 3.5 cents per litre would produce enough revenue to fund the priorities for land transport in the 2018 GPS.