Legislation for a regional fuel tax introduced to Parliament by Transport Minister Phil Twyford

Auckland Mayor Phil Goff says a fuel tax will provide up to $1.5 billion to invest in sorely needed transport infrastructure for the city.

Legislation for regions to introduce a petrol tax, initially in Auckland, was introduced into Parliament today by Transport Minister Phil Twyford.

The Land Transport Management (Regional Fuel Tax) Amendment Bill introduces a mechanism to raise funds for transport infrastructure programmes that would otherwise be delayed or not funded.

A regional fuel tax of 11.5 cents a litre, including GST, has been proposed by Auckland Council and is currently being consulted on as part of the council's 10-year budget.

Early feedback shows half of Aucklanders support the tax and 41 per cent are opposed. The other 9 per cent do not know.

Auckland Mayor Phil Goff said the legislation will allow the council to implement a fuel tax when an Interim Transport Levy of $114 per household expires in June.

"There are still some details we need to work through with the Government, but this is a welcome first step.

"Worsening traffic congestion is a significant issue in Auckland. A fuel tax will provide up to $1.5 billion to invest in critical transport infrastructure in Auckland," Goff said.

The regional fuel tax applies to petrol and diesel and can be charged up to a maximum rate of 10 cents per litre, exclusive of GST, for a maximum of 10 years. It will be paid by fuel distributors when they deliver fuel to service stations and commercial users inside the region.

Rebates, similar to those available for fuel excise duty, will be available to those that do not use fuel on roads.

The Bill will go to Select Committee for public feedback. The law is expected to be passed in June, ready for potential implementation in the Auckland region from July 1.