Labour announces fuel tax freeze, future 22-cent rise becomes talking point

Labour will not increase fuel excise for the next three years if it wins November’s election, leader Chris Hipkins has pledged, turning the Government’s legislated 22-cent programme of pump tax rises into an election battleground.

“Today I confirmed Labour will not increase fuel excise tax over the next three years,” Hipkins says. “When families are already paying more at the pump, the last thing they need is Christopher Luxon and National reaching into their pockets for more.”

The coalition Government has legislated increases to fuel excise and road user charges starting with 12 cents a litre in January 2027, shortly after the election, rising to 22 cents by 2029, to fund its roading programme.

“The current Government intends to increase fuel taxes by 22 cents a litre over the next term, starting soon after the next election,” Hipkins says. “Fuel is not a luxury. People need it to get to work, get their kids to school, run their businesses and get around their communities.

“Higher fuel costs also flow through the entire economy. They mean higher costs for farmers, truck drivers, tradies and businesses, and ultimately higher prices for the goods New Zealanders buy.

“We know global oil prices are outside the Government’s control. But taxes at the pump are a choice.”

The pledge lands with pump prices elevated by the fuel crisis that has run since the Middle East conflict began, and it sharpens the tax-and-transport divide heading into November. Transport minister Chris Bishop has previously defended the increases as necessary to pay for roads, while finance minister Nicola Willis has ruled out cutting excise in response to the fuel crisis.

The freeze also raises questions for the transition to electronic road user charges. The Government’s eRUC system is expected to be open for business in 2027, with officials advising petrol prices should fall as excise is removed and replaced by distance-based charging. Labour has not said how a three-year excise freeze would interact with that transition, or how it would fill the land transport funding gap the scheduled increases are designed to cover.

The announcement is Labour’s second recent play to motorists, after the party ruled out a return of the Clean Car Discount and its associated fees earlier this month.