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Home / New Zealand

Diesel RUCs - tax when you pump

NZ Herald
10 May, 2012 05:30 PM4 mins to read

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Drivers say all fuel should be treated the same at the service station. Photo / File

Drivers say all fuel should be treated the same at the service station. Photo / File

Kiwis overwhelmingly want the Government to tax all fuel at the pump - and do away with the exception that is road user charges for diesel.

That's the result of an online poll last week by Driven editor Matt Greenop, who talked up the latest diesel fuel technology and asked why Kiwis were not jumping into modern diesel cars at the same rate as Europeans.

"It comes down to the hideous requirement that owners of passenger diesels are forced to pay Road User Charges," Greenop wrote. "These charges were obviously designed for commercial road transport - private passenger vehicles should not be subject to them.

"We think it's time the Government rethought road user charges - what do you reckon?"

Typical of the response from readers was this from James: "If you do scrap road user charges then the tax on diesel needs to be equal to that on petrol.

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"And then you need a way of ensuring that farmers using diesel off-road are not penalised by having to pay for road transport in the price of their fuel. And then you need a way of ensuring that the system for this isn't open to abuse."

Road user charges (RUC) of $40/1000km apply to heavy transport vehicles over 3.5 tonnes and all vehicles of 3.5 tonnes or less powered by a fuel not taxed at the pump. Diesel is not taxed at the pump, but petrol is.

The Government passed a revised RUC bill on February 14. Among other things, it seeks to pull into line those who are rorting RUC, evasion that the Government says costs it $30 million a year. It says the new act will come into force before August 1 and contains a package of reforms to simplify and modernise the RUC system. But critics say there is nothing simple about RUC. The Motor Trade Association has called it "cumbersome".

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It says: "Petrol-powered vehicles are subject to an excise tax system at the pump. It is simple to administer, motorists have no choice but to comply with it, and crucially, it places costs against vehicle owners based on the overall efficiency of their vehicle: the more fuel you use, the more excise tax you contribute.

"The current RUC system for cars and light vehicles provides a straight line or flat rate of tax, irrespective of the efficiency of the vehicle.

"So, depending on the model, a large capacity, diesel-powered SUV pays virtually the same in RUC as a small diesel powered car, despite consuming diesel at around three times the rate.

"This, in effect, unfairly discriminates against the owners and users of small diesel vehicles."

Discover more

New Zealand

Matt Greenop: Is it time to kill diesel charges?

04 May 05:30 PM

John agrees: "Having owned a diesel, the absolute worst thing was the inconvenience of having to stand in line at the post office to pay for something that I didn't think applied to me. I owned a small diesel Citroen, not a commercial truck."

Anita: "The rationale behind the RUCs is that a lot of diesel is used off the roads (heating, tractors, boats etc) and therefore isn't taxed in the same way as petrol.

"RUCs is how the owners of diesel vehicles fork out for our share of the cost of road building, medical services arising from vehicle accidents, road policing etc. The catch is that our little Hyundai Getz causes a tiny amount of wear on the road - but we get charged the same RUCs as much larger vehicles.

"Thus it's not the private ownership which is the problem, but the size of the vehicle. Charge a lower rate for vehicles under two tonnes and we'd be getting somewhere."

Adds reader Ford: "The RUCs shouldn't be abolished per se, but they should be linked to engine size and carbon emissions as they are in other more civilised countries.

"I think Tony Friedlander might get up on his hind legs if that were to happen though, as trucks could then be RUC-taxed based on their size and the trucking lobby would hate that."

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