Petrol tax replaced by road user charges

The story so far

Cabinet has agreed to legislative reforms to scrap petrol tax and move all light vehicles onto electronic road user charges.^{6 Aug 2025} Transport Minister Chris Bishop called it a major overhaul of road funding, and the AA backed the shake-up while asking for low administration costs and raising privacy and data concerns.^{6, 7 Aug 2025} The government plans to introduce road user charges for all vehicles by 2027, and Bishop acknowledged the change will increase revenue.^{7 Aug 2025} Experts suggest many drivers could face higher costs, and while electric vehicle owners may keep running cost advantages, non-plug-in hybrids could face higher operating costs.^{7, 12 Aug 2025}

Latest

The proposal is intended to ensure all vehicles contribute fairly to road maintenance and improvements. Specific details on costs and timing remain unknown.^{6, 12 Aug 2025}

What's next

Law changes are expected next year.^{6 Aug 2025} The government plans to have road user charges in place for all vehicles by 2027.^{7 Aug 2025}

Key moments

1. 6 Aug 2025Cabinet agrees to legislative reforms scrapping petrol tax for road user charges.
2. 7 Aug 2025AA supports the shake-up but raises privacy and data collection concerns.
3. 7 Aug 2025Government targets road user charges for all vehicles by 2027.
4. 7 Aug 2025Bishop acknowledges the new system will increase revenue.
5. 12 Aug 2025Non-plug-in hybrids could face higher operating costs under the proposal.

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