Vehicle registration fees are set to come down after a review finding motorists are paying too much for the service, the Government has announced.
However, running a car on petrol is set to cost about $30 more a year as increases to fuel taxes come into effect on August 1.
Transport Minister Gerry Brownlee made the dual-announcement on the future costs of running a vehicle this afternoon.
He said vehicle licensing and registration fees were set to come down for the first time since the 1990s to make sure they remain fair and accurate.
The changes were recommended after a NZ Transport Agency review found the fees no longer reflected the cost of administering the service, he said.
"The new approach to fee setting is fairer and more transparent, and has the added benefit of resulting in slightly cheaper fees for the majority of road users."
In a move signalled within Budget 2012, Mr Brownlee said petrol excise duty was set to rise 2c a litre, while road user charges for diesel vehicles will go up 4.1 per cent.
He said the excise tax increase was expected to raise the cost of running a petrol vehicle by about $30 a year.
The increased charges will produce extra revenue to invest in transport projects throughout New Zealand, Mr Brownlee said.
"This increase is effectively a catch-up to ensure there continues to be sufficient revenue available to meet the Government's land transport expenditure targets.
"The funds raised will contribute to the annual $1 billion investment in developing the country's state highway infrastructure, which is crucial in assisting economic growth and enabling greater productivity from the transport network."
Budget 2012 projections showed the petrol excise increase will raise an additional $55 million in the 2012/13 year and a total of $235m over the first four years.
The increased Road User Charges will raise $38m extra in year one and $186m over four years.
