Little immediate relief as government floats retreat on future fuel tax hike

Summarised by Centrist

Christopher Luxon has ruled out broad relief at the pump while signalling that the government may abandon a fuel tax increase that was not due to begin until January 2027. 

Speaking to Breakfast, Luxon said the planned 12 cents per litre increase was now “possibly unlikely”, but rejected a GST cut on fuel and did not back free or subsidised public transport. Instead, he repeated that any support would have to be “timely, targeted and temporary”.

Motorists are left facing rising prices with little immediate help beyond the possible cancellation of a future tax rise. Luxon argued that cutting GST would mainly benefit “wealthier people”, and said only that a “whole range of potential support options” was being discussed. 

National had campaigned against Labour’s proposed petrol tax hikes and promised not to raise fuel taxes in its first term. Once in office, however, it did not scrap the increase outright. It simply deferred the same 12-cent rise until January 2027, after the current term ends, with a further 6 cents planned for 2028 and annual 4-cent increases thereafter.

Transport Minister Chris Bishop signalled that ministers still see higher fuel taxes as necessary to plug transport funding gaps, warning there were “consequences” to freezing the duty, even as the government backed away from imposing the increase during a fuel crisis.

Read more over at 1News

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