The government intends to extend road user charges so every vehicle in New Zealand pays per kilometre from 2027. That would bring petrol cars into the same charging system currently used for diesel vehicles and electric vehicles, replacing the litre-based petrol excise. The proposal has provoked disagreement among experts over whether it will reduce or increase carbon dioxide emissions, and which vehicle owners will face the largest bill increases.
What is changing
Under the existing mixed system, petrol vehicles pay a petrol excise by the litre while diesel vehicles and electric vehicles (EVs) pay road user charges, or RUCs, calculated per kilometre. From 2027 the government proposes to move all vehicles onto a single per-kilometre RUC system. The change is intended to make contributions to road costs consistent across vehicle types, but it also alters the tax signals drivers face about fuel use and vehicle choice.
The RUC system already covers EVs, which were brought into it in 2024. That step created a situation where EVs were paying more tax per kilometre than many small petrol cars and non-plug-in hybrids, a disparity critics called a penalty on electric vehicles. Universal RUCs aim to remove that anomaly by placing every vehicle on the same charging basis.
How the numbers shift for drivers
Advocacy and research groups have modelled the likely effects of universal RUCs on typical annual running costs, combining RUCs with fuel or electricity costs for an average distance of about 11,000 kilometres per year. The results indicate substantial variation by vehicle type.
Models show that some low-emission hybrids will face the largest increases. For example, a small hybrid such as a Toyota Aqua or similar non-plug-in hybrid could see running costs rise by several hundred dollars a year under universal RUCs. A Toyota RAV4 hybrid is estimated to face an increase in the order of $300 a year, and a RAV4 petrol driver would face an estimated increase of around $118 a year. By contrast, very thirsty V8 petrol cars are projected to pay less under a per-kilometre system than under the current fuel excise, with one example modelled to drop by about $261 a year.
Diesel utes and some large electric vehicles in the modelling show smaller changes or little net difference once RUCs and energy costs are combined. Two large electric models included in the calculations — both premium, all-wheel-drive EVs — were estimated to see no significant change in total running costs compared with equivalents, and some EVs still come out cheaper overall when both RUCs and energy costs are considered.
