Petrol tax let-up for Auckland

The whole country will soon find itself funding Auckland's roads after the Government yesterday announced it would increase the national petrol tax and revoke regional fuel taxes.

The national fuel tax will increase by 3c a litre in October this year and again in October 2010.

The increase includes the 1.5c a litre planned by the previous government.

The Auckland regional fuel tax, which was to increase to 9.5c a litre in two years, was approved by the Labour government to fund projects including electrification of the city's trains.

Canterbury, Bay of Plenty, Waikato and Wellington were also considering a regional tax, Transport Minister Steven Joyce said.

The regional tax was canned in preference of a "simpler system which delivers benefits to road users across the board".

But Auckland would not miss out.

Mr Joyce said the Government was committed to the electrification of Auckland's rail network and the plans would continue unchanged.

The project would be funded by the Crown through capital appropriation or additional debt funding "until such time as patronage levels reach the point where regular passenger transport subsidies are sufficient".

"The Government has decided in principle that now that KiwiRail has been repurchased by the Government, it should be the owner of the new Crown-funded passenger rail stock in Auckland and Wellington.