New Zealand has scrapped a planned NZD 12-cent-per-litre fuel excise increase for 2027, with a NZD 1.476 billion National Land Transport Fund top-up to offset lost revenue and the next 5-cent rise deferred to 1 January 2028.
New Zealand has cancelled a planned 12-cent-per-litre fuel excise increase scheduled for 1 January 2027, Finance Minister Nicola Willis and Transport Minister Chris Bishop announced on 31 August 2026.
The next fuel excise increase will instead take effect on 1 January 2028, at 5 cents per litre, followed by three further 5-cent increases at six-month intervals. Annual 5-cent increases will resume from 1 January 2030. Road user charges will rise by equivalent amounts at the same intervals.
The Government will top up the National Land Transport Fund to compensate for lower fuel excise revenue. The measure is expected to cost NZD 1.476 billion over the forecast period.
The cost will be partly offset by the NZD 450 million fuel response contingency established through Budget 2026, with the remaining cost managed through and reflected in the PREFU.
The Government said the decision would provide households with more time to adjust to cost-of-living pressures while maintaining funding for the land transport system.
