As the cost of living continues to rise, the New Zealand Government has extended its price cut to fuel excise duty, road user charges and public transport until 31 January, 2023.
Earlier this year in March, fuel prices were reduced by 25 cents per litre to alleviate the pressure put on Kiwis at the pump amid soaring fuel prices. Price reductions were also made to road user charges as well as the introduction of half-price public transport fares.
The cut to fuel excise reduces the cost of filling up a 40 litre tank of petrol by over $11, and for a 60 litre tank, over $17, says the Government. Half price public transport sees an average person who pays two $5 fares a day save $25 a week.
“We know that inflation is rising across the world, and cost of living pressures are making it tough for New Zealand right now. High fuel prices, particularly driven by the impact of the Russian invasion of Ukraine, are a global problem affecting households and businesses in New Zealand,” Grant Robertson, Minister of Finance said.
“That is why we moved in March to cut fuel excise tax by 25 cents a litre and road user charges by equivalent levels, along with halving public transport fares.”
It was announced that inflation has hit 7.3 per cent this morning, the highest it’s been in 32 years. This is largely due to rising rents and construction costs.
However, the New Zealand Treasury estimates that the combined impacts of the price cuts will reduce headline inflation by 0.5 percentage points in the June 2022 quarter.
“The global fuel price crisis is not leaving many untouched so we’re pleased we’re doing what we can to ease pressure on motorists,” Megan Woods, Minister of Energy and Resources said.
Extending the fuel excise and RUC reductions until the end of January is estimated to cost $589 million. This is money that goes directly to the National Land Transport Fund to pay for building and maintaining roads, and funding public transport, walking and cycling initiatives.
The cost to extend half price public transport is an estimated $63.1 million.