The Government's scheme to increase petrol tax and road user charges will hit consumers hard in these tough economic times, the National Association of Retail Grocers says.

Transport Minister Gerry Brownlee today announced that petrol tax would increase by three cents a litre each July 1 for the next three years, and road user charges would go up by an equivalent amount.

National Association of Retail Grocers of New Zealand executive director Trina Snow said the increases would inevitably result in higher food prices.

"I think every increased cost has got to be collected somewhere. The transportation of goods is going to increase and therefore the cost of the goods is going to increase and the consumer will end up paying for it eventually,'' she said.


"I think this is bad news at this time.''

Automobile Association spokesman Mark Stockdale said the petrol tax increase would cost motorists on average about $30 extra a year.

He said it was standard for petrol tax and road user charges to go up, but the latest increases were at the "upper limit'' of previous price hikes.

"The reality is that the money paid in tax is spent for the benefit of road users; it's spent on maintaining and building roads, it's spent on building newer, safer, more reliable roads, and it's also spent on public transport.

"No-one likes a tax increase but, as the saying goes, two things in life are certain: death and taxes.''

Road safety campaigner Clive Matthew-Wilson agreed the latest increases were inevitable but feared the money generated wouldn't be spent wisely.

"As cars have become more energy efficient the amount that the government gets from fuel taxes has obviously dropped, which has led to an increase in the amount of fuel tax to make up for it.

"I just think that it's a pity that the Government continues to live in a 1950s timewarp where they want everyone to drive a car and to have cities like Auckland sprawling out to infinity, when what most Aucklanders want now is some easier alternative to a car.''

Green Party transport spokesperson Julie Anne Genter said the tax hikes were a waste of taxpayer money that would unfairly make working families pay for motorways few will use.

Mr Brownlee said the increases were required to deliver the Roads of National Significance (RoNS) programme and other roading projects to the timeline set out in the Government's land transport funding policy.

The money would allow for continuing investment in the Government's state highway building programme and other transport projects.

In particular, it would allow work to begin on the Rangiriri and Tamahere-Cambridge sections of the Waikato Expressway, the Mackays to Peka Peka section of the Wellington Northern Corridor, and the four-laning of the Groynes to Sawyers Arm section of the Western Corridor in Christchurch.