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Motorists face paying more for petrol through regional fuel taxes, levied to pay for local transport projects including the electrification of Auckland's suburban trains.
In an announcement understood to form part of the Government's Budget, the Auckland region will be given the go-ahead to introduce a fuel tax
of 10c a litre.
This would push the cost of 91-octane fuel to $1.60 a litre.
Just over a third of the rise - 3.5c - will pay for the rail electrification project, which fits well with the Government's climate change ambitions.
The rest of Auckland's fuel levy will help to pay for Rodney District Council's link-road between Whangaparaoa Peninsula and the Northern Motorway, and for completing the Manukau-Waterview western ring route.
A 10c-a-litre levy would add $6 to the cost of filling an average 60-litre tank.
A fuel levy could also be introduced in Wellington - although to a lesser extent - and other regions will be able to request the right to levy for transport infrastructure.
The idea of a regional fuel tax to boost public transport has been around for some time. Auckland Regional Council's support for it last month appeared to warm the Government towards electrifying Auckland's rail system.
The $560 million electrification plan has been the subject of lengthy deliberation in the Beehive. It is thought the Government wants the region to control the new levy - so the Beehive is not seen as directly increasing fuel taxes to pay for new transport projects.
A previous attempt at a regional fuel tax to finance public transport proved unpopular. In 1993, regional councils were given the power to raise a 2c--a-litre petrol tax.
But it was so unpopular that it lapsed within three years.
This time, the rail electrification project that it will finance could be marketed in conjunction with the push for climate change, giving it a better chance of being accepted.
The Green Party has been campaigning hard for electrification, and co-leader Jeanette Fitzsimons was last night pleased to hear from the Herald that the project looked likely to go ahead.
She said the decision needed to be made now, because unless the switch to electric trains was made definite more "dirty diesel" locomotives would be ordered.
Some diesels would still be needed to bridge the gap until the electrification work was complete, she said, but that would be far better than the alternative.
Ms Fitzsimons said the regional petrol tax should be only for public transport. "I don't think any of the petrol tax should go into roading. It should all go into improving Auckland's public transport system."
The way it is administered will be an important part of the new tax plan.
It is understood fuel companies have been kept informed about the regional tax plan and are bracing for a 10c--a-litre levy in Auckland.
But Ms Fitzsimons said that in 1993 fuel companies defied the Government and refused to lift charges only in Auckland, saying that they would instead even out the increase throughout the country.
The Government could get around this by passing legislation requiring regional rises.
The looming regional fuel tax fits with a statement Prime Minister Helen Clark made in February that new sources of money were needed for transport schemes.
