Vehicle registration fees to drop, petrol costs to rise

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All consumers are expected to be hit by a hike in road user charges for diesel vehicles, but we'll save money on vehicle registration fees.

In a move signalled in Budget 2012, Transport Minister Gerry Brownlee confirmed today that road user charges for diesel vehicles will go up 4.1 per cent and petrol excise duty was set to rise 2c a litre from August 1, meaning fuel for the average petrol vehicle will cost about $30 more per year.

However, vehicle registration fees are set to come down after a review finding motorists are paying too much for the service.

Mr Brownlee said vehicle licensing and registration fees will drop for the first time since the 1990s to make sure they remain fair and accurate.

The changes were recommended after a review by the New Zealand Transport Agency found the fees no longer reflected the cost of administering the service, he said.

"The new approach to fee setting is fairer and more transparent, and has the added benefit of resulting in slightly cheaper fees for the majority of road users.''

Road Transport Forum CEO Ken Shirley said the announcement of a 4.1 per cent increase on road user charges is a two-year increase in one.

"There was no increases to road user charges last year - principally because it was a election year, they [the Government] say it's because of the state of the economy, well the economy's no better this year.''

He said ultimately the increase will affect consumers, as 12 to 15 percent of the retail price of all goods is the road freight component.

"The road user charges are a significant amount - about 10 per cent - of that road freight cost.

"It will have an impact on everything from flatscreen TVs through to packets of Weet-Bix.''

Mr Brownlee said the increased charges will produce extra revenue to invest in transport projects throughout New Zealand.

"This increase is effectively a catch-up to ensure there continues to be sufficient revenue available to meet the Government's land transport expenditure targets.

"The funds raised will contribute to the annual $1 billion investment in developing the country's state highway infrastructure, which is crucial in assisting economic growth and enabling greater productivity from the transport network.''

Budget 2012 projections showed the petrol excise increase will raise an additional $55 million in the 2012/13 year and a total of $235m over the first four years.

The increased Road User Charges will raise $38m extra in year one and $186m over four years.