Petrol tax set to rise nine cents by 2015

Photo / File

Petrol tax is set to rise by three cents per litre at the start of July this year and will continue to rise for the next two years.

In December, Finance Minister Bill English announced excise on petrol would increase by nine cents per litre by July 2015.

The Customs and Excise (Budget Measures - Motor Spirits) Amendment Bill will have its third and final reading in Parliament under urgency.

Under the legislation the excise on petrol will rise by three cents per litre in July of each of the next three years - until the total tax take reached 59.5 cents a litre by the middle of 2015.

A litre of 91 octane now costs 208.9 cents at Z Energy and BP service stations, while diesel is selling for between 145.9c and 146.9c a litre.

A Transport Ministry official has estimated the increase in excise would cost each driver an additional $45 a year.

It has been signalled that revenue from the increase in excise tax would contribute to roads of national significance.

Labour said the three petrol tax increases are needed only because the Government gave top income earners big tax cuts in 2010.

Labour's Revenue and Associate Finance spokesman David Cunliffe said an extra $900 million was being taken from people's pockets through petrol taxes.

"Over $1 billion more that is needed for ACC is being collected from New Zealanders in levies - an extra $900 million is being taken from people's pockets through petrol taxes."

Labour's finance spokesman David Parker said Labour will oppose the bill, which is expected to be passed under urgency.