When you last bought petrol, 73.784 cents per litre was collected by the government as fuel excise (excluding GST). Motorists are charged GST on the fuel excise, which amounts to a tax on a tax. The AA has called for the GST on excise to be removed - a move that would reduce prices by 11 cents per litre and help relieve the financial burden on New Zealanders.
Fuel excise (petrol)
The fuel excise portion includes:
- 66.524 cents - National Land Transport Fund
- 6 cents - ACC Motor Vehicle Account
- 0.66 cents - Local Authorities Fuel Tax
- 0.6 cents - Petroleum or Engine Fuels Monitoring Levy
In addition, GST is collected on the overall price of fuel including excise. The GST on excise amounts to an 11 cents per litre "tax on taxes".
There are no excise taxes on diesel other than 0.33 cents Local Authorities Fuel Tax, and GST. Instead, diesel vehicles pay Road User Charges. All fuels also pay an Emissions Trading Scheme levy (approximately 6.2 cents per litre for petrol, and 7.2 cents per litre for diesel).
In Auckland, an additional 10 cent per litre Regional Fuel Tax is levied on all petrol and diesel sold in the Auckland region (from 1 July 2018).
It is government policy for all of the petrol excise tax motorists pay to be directed to the National Land Transport Fund for investment back into New Zealand's land transport system. The AA lobbied hard on behalf of motorists for many years to have all the taxes devoted to road building and maintenance, road safety education and enforcement, and subsidies for public transport.
Previously, about 19 cents per litre of the tax motorists paid on petrol was diverted by the government to non-road and transport related projects.
AA speaking up for motorists
The AA welcomed the decision to pledge all excise tax to the National Land Transport Programme from July 2008. For far too long there had been significant under-investment in the nation's road and transport network, and tax diversion has been unfair and at the expense of motorists.
Motorists must not be selectively taxed or treated as an easy source of tax revenue to pay for projects that would be more fairly funded by other sources such as rates or general taxation.