This page contains answers to frequently asked questions on road user charges and petrol excise duty.
Why do we have petrol excise duty and road user charges?
It costs money to build, maintain and operate our land transport system. The revenue from petrol excise duty and road user charges help pay for activities related to the building, maintenance and operation of our land transport system.
Where does the money go?
The revenue from petrol excise duty and road user charges goes into the National Land Transport Fund, administered by the NZ Transport Agency. The National Land Transport Fund is dedicated (or ring-fenced) to be spent on our land transport system, as set out in the National Land Transport Programme(external link).
How do I pay petrol excise duty?
Petrol excise duty (also known as ‘fuel excise duty’) is paid by fuel companies when petrol (also known as ‘motor spirits’) is imported or leaves the place of production (e.g. refinery). Fuel companies pay petrol excise duty to the New Zealand Customs Service. Fuel companies recover the cost of petrol excise duty from consumers.
Do I have to pay road user charges?
All vehicles that run on a fuel that is not petrol must have a valid road user charges distance licence, including vehicles powered by diesel, hydrogen or biodiesel.
Light and heavy electric vehicles are exempt from road user charges. Light electric vehicles will be subject to road user charges from 31 December 2021 or once the electric vehicle fleet reaches 2 percent of the total fleet. Heavy electric vehicles will subject to road user charges from 31 December 2025. Click here to find out more about electric vehicles.
Road users with a CNG or LPG vehicle pay excise duty and are therefore not subject to road user charges.
Vehicles that must display a valid road user charges distance licence, may be checked by the NZ Police, the NZ Transport Agency or at the time of warrant or certificate of fitness checks.
How do you decide how much we pay?
The rates of petrol excise duty and road user charges are set to raise sufficient revenue to pay for planned transport expenditure, set out in the Government Policy Statement on land transport. To find out additional information on the cost of petrol excise duty compared to road user charges, click here.
The cost of a road user charges distance licence varies, depending on the type of vehicle, axle and tyre configuration and its weight. In general, the heavier a vehicle is, the more damage it does to the road surface. All these factors impact the apportionment of rates between various vehicle types.
Road user charges are distance-based, and are purchased in multiples of 1,000 kilometres from the NZ Transport Agency (and approved road user charges agents).
What about Goods and Services Tax (GST)?
GST is added to the price of petrol at the pump. The rates of petrol excise duty are exclusive of GST. Rates of road user charges are inclusive of GST.