Government must cut fuel tax as Middle East tensions push petrol above $3

The New Zealand Taxpayers’ Union is calling on the Government to temporarily cut fuel taxes as global tensions in the Middle East drive oil prices higher and push petrol prices above $3 per litre in many parts of the country.

Taxpayers’ Union spokesman Jordan Williams says households should not be forced to shoulder the full cost of global instability.

“Petrol prices are surging past $3 a litre in many parts of the country. At a time when households are already struggling with the cost of living, the Government needs to wear some of the burden rather than lumping it all on motorists.”

“Kiwis can’t control wars overseas, but the Government controls how much tax we pay at the pump. When petrol hits three dollars a litre, it’s working families and small businesses that feel it first.”

Williams says a temporary reduction in fuel excise would provide immediate relief.

“Reducing fuel tax is a proven way to support households when global fuel prices spike. In 2022, Jacinda Ardern’s Government cut fuel excise by 25 cents per litre to ease the cost-of-living crisis caused by soaring oil prices following Russia’s invasion of Ukraine.”

“A similar three-month reduction today would cost roughly $350 million in foregone revenue to the National Land Transport Fund, the same order of magnitude as the 2022 policy.”

Williams says the relief could easily be funded by reprioritising wasteful spending.

“With billions of dollars being funnelled through schemes like the Regional Infrastructure Fund — which is fast looking like a Provincial Growth Fund 2.0 — the Government has plenty of room to fund temporary relief for motorists.”

“Redirecting wasteful spending into the National Land Transport Fund would allow the Government to provide fuel tax relief while still maintaining investment in transport infrastructure.”

“Global oil shocks shouldn’t become an excuse for the Government to collect windfall tax revenue. When fuel prices spike, taxpayers deserve relief.”