The planned 12-cent-per-litre fuel excise increase from January 2027 has been cancelled, with equivalent road user charge increases also postponed, Finance Minister Nicola Willis and Transport Minister Chris Bishop announced.
Instead, fuel excise will rise by 5 cents a litre from January 2028, followed by three further 5-cent increases at six-month intervals before annual 5-cent increases resume in 2030, with road user charges increasing on the same schedule.
Ministers said the delay would provide cost-of-living relief while ensuring sufficient funding for roads and transport infrastructure, where project costs have risen substantially since 2020.
The National Land Transport Fund will receive additional funding to compensate for lost excise revenue, at an estimated cost of $1.476 billion over the forecast period, partly covered by a $450 million fuel response contingency established in Budget 2026.
Image credit: Engin Akyurt
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