Motorists should fill up now if they want to beat the tax going up on petrol on 1 July, says the AA.

The 3 cents per litre increase is the second of three scheduled annual tax increases. The latest will take the total amount of petrol excise (not including GST) to just over 67 cents per litre. 56.5 cents of this is dedicated to the National Land Transport Fund to pay for road repairs, road safety upgrades, road safety enforcement, public transport subsidies, and building new roads. Another 9.9 cents per litre pays for ACC motor vehicle accident costs.

“No one likes paying more taxes, but motorists can take some comfort that, unlike other countries, every cent of excise pays for transport projects which they benefit from. Even though taxes make up about 43 per cent of the cost of a litre of petrol, or 97 cents per litre including GST, New Zealand still has the fifth lowest fuel taxes in the OECD, and amongst the lowest fuel prices,” AA PetrolWatch spokesperson Mark Stockdale said.

“Motorists should fill up to avoid the tax increase, and also shop around to take advantage of the discounted fuel and supermarket vouchers that are on offer,” Mr Stockdale added.

Pump up your tyres to beat the tax

The AA says other ways motorists can offset the tax rise and reduce their fuel bills is by pumping up tyres once a month, braking and accelerating gently and switching the air conditioning off when not needed.

According to the AA, the extra 3 cent per litre tax will add about 90 cents to the cost of a typical fill of 30 litres. For the average motorist doing 12,000km a year in a typical car (up to 2 litres engine capacity), that will add about $27 a year.

The price of diesel is not expected to change on 1 July, because there is no tax on diesel other than GST. But diesel Road User Charges will also be rising $5 per 1000km – double what it should be according to the AA.

“The reason diesel prices are much lower than petrol is because it doesn’t incur the 67 cents per litre excise included in petrol. But diesel vehicles pay Road User Charges instead and the $5 increase per 1000km is too much. To match the extra 3 cents per litre petrol tax other motorists are paying, owners of diesel cars should only be paying an extra $2.50 per 1000km, or $30 over 12,000km,” says Mr Stockdale.

For fuel saving tips, check out the AA’s short video on YouTube.