Global Daily Tax News, New Zealand Further Delays Significant Hike To Fuel Excises, (Sep 3, 2026)

The New Zealand Government has cancelled a fuel excise hike planned for next year.

The Government will also delay the increase to road user charges scheduled for January 1, 2027. Instead, road user charges will be increased from January 1, 2028, at rates equivalent to the increase in fuel tax.

Finance Minister Nicola Willis stated: "Fuel excise was scheduled to resume annual increases starting with a 12c per litre increase from January 1, 2027, with equivalent increases to road user charges. That has now been scrapped, with the next increase of five cents a litre now taking effect from January 1, 2028."

"Cancelling next year's fuel excise increase and spreading the change over time from 2028 will give Kiwis more time to recover from the period of post-Covid economic pain and recent uncertainty in the Middle East."

Transport Minister Chris Bishop noted that, since 2020, the average cost of transport projects has increased by as much as 45 percent, while fuel excise has remained frozen – falling in real terms by around 20 percent. He said: "While pausing fuel excise increases was the right choice as New Zealanders weathered an economic storm, unless they begin again soon, the financial foundations of our land transport system will be undermined."

"For New Zealanders, that would mean roads littered with potholes, cancelled projects, and an inability to respond when communities are cut off following severe weather events."

"To prevent this, the Government has agreed on a new, more sustainable path for fuel tax increases. There will be no increase to fuel tax in 2027, with the next increase taking effect on January 1, 2028."

"Instead of a one-off 12-cent increase, we have spread these changes over time to make the transition fairer and more manageable for New Zealanders, as the economy continues to pick up and wages grow."

"Fuel tax will rise by five cents on January 1, 2028, followed by three further 5-cent increases at six-month intervals. Annual increases will then resume from January 1, 2030, of 5 cents per year. Road user charges will be subject to equivalent increases at the same intervals."