Transport Minister Chris Bishop has told a public interview that Cabinet has approved the first steps to phase out petrol excise at the pump and move New Zealand drivers onto electronic road user charges, with initial changes planned to begin from 2027.
What the minister announced
Speaking to ThreeNews, Mr Bishop said the Government will start shifting all vehicles onto an electronic RUC system, following a policy commitment in the coalition agreement. The move aims to replace the current petrol tax collected at the point of sale with a usage-based charge collected electronically.
The minister acknowledged some drivers may be wary of another regular bill, but argued the change could be financially positive for many households. As he told ThreeNews, “Actually, from a cash flow point of view, it’ll help people,” adding that paying petrol tax immediately at the pump currently means drivers shoulder the cost upfront.
Bishop framed the reform as a response to a long-term funding problem for the National Land Transport Fund. He noted that increasing vehicle fuel efficiency and the rising uptake of hybrids has reduced the revenue base that petrol excise provides. That decline, he said, threatens the money available for building and maintaining roads.
How the new system could work
The minister suggested the replacement RUCs could be collected through an app, where motorists log trips or receive a monthly charge based on recorded usage. He indicated enforcement would rely on electronic monitoring similar to systems already used for heavy vehicles.
No firm, detailed design was released at the announcement. Bishop said Cabinet had agreed to take the first steps, but many specifics remain unresolved, including how rates will be set, how privacy and data security will be managed, and what exemptions or discounts might apply.
Timing and scope
Bishop told ThreeNews there is no single start date yet, but that implementation should begin from 2027 onwards. Trucks are already subject to electronic RUCs, so the planned expansion would bring light petrol and hybrid vehicles into the same regime.
