Fuel tax increase cancelled

The story so far

Finance Minister Nicola Willis indicated that a fuel tax increase scheduled for January 2027 would not go ahead, pending Cabinet agreement.^{27 Aug} The Labour Party promised not to raise fuel excise duty for a full term if it returns to government.^{27 Aug} The Government then scrapped the 12c per litre fuel excise increase planned for January 2027, along with planned road user charge increases.^{31 Aug} In its place, a smaller increase of five cents per litre is expected from 1 January 2028, backed by a $1.476b top-up to the National Land Transport Fund.^{31 Aug}

Latest

The Government has formally cancelled the January 2027 increases, and ministers say this will require over one billion dollars in extra borrowing.^{31 Aug; 1 Sep} Labour has proposed freezing fuel tax increases for three years but has not disclosed the total cost.^{1 Sep}

Key moments

1. 27 AugWillis signals the January 2027 fuel tax rise will not proceed.
2. 27 AugLabour promises no fuel excise increase for a full term.
3. 31 AugGovernment scraps the 12c per litre increase and road user charge rises.
4. 31 AugSmaller five cent increase expected from January 2028, with $1.476b top-up.
5. 1 SepMinisters say scrapping the increase needs over $1b more borrowing.
6. 1 SepLabour's three-year freeze plan lacks a disclosed total cost.

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