Iran war: Labour sees case for cutting fuel taxes, but ACT doesn’t

Monday, 9 March 2026

Finance Minister Nicola Willis says she is not considering a fuel excise tax cut, and has warned petrol companies not to take advantage of spiking oil prices as a result of the Middle East conflict.

Speaking at a post-Cabinet press conference on Monday she said there is no immediate challenge to New Zealand’s supply, with 29 days’ worth of fuel stock in the country and another 29 days en route.

Earlier, Labour said there “may” be a case for cutting fuel taxes again as prices at the pump threaten to sail past $3 a litre as the Iran war hits oil production and shipping in the Middle East.

But ACT leader David Seymour rejected the idea, which is being pushed by the right-wing Taxpayers’ Union.

Read more:

• Crude oil prices surpass US$100 a barrel as the Iran war impedes production and shipping

• Iranian state TV says Mojtaba Khamenei, son of late supreme leader, is named successor

• Brace for NZ petrol prices to hit $3 milestone, and diesel at $2.50 amid Iran conflict

Labour in Government slashed the fuel excise duty (FED) and road user charges (RUC) by 25 cents a litre in March 2022 in response to a global energy crisis triggered by the war in Ukraine.

As West Texas Intermediate (WTI) crude oil nudges US$110 a barrel, coalition Government ministers will be acutely aware of how much potential inflationary impact this could have on petrol, diesel, and any goods that need transportation.

Labour’s finance spokesperson Barbara Edmonds told The Post any decision would need to consider the cut to Crown revenue.

“There may be a case for temporarily reducing the fuel excise duty as global petrol prices rise and households feel even greater cost of living pressures, but we also need to be upfront that it comes at the cost of maintaining infrastructure funding,” Edmonds said.

ACT leader David Seymour said he did not support Government intervention at the pump.

“It is politically tempting, but with the Government in deficit that money would be borrowed. A temporary fuel tax cut would be paid for by future taxpayers.”

Petrol is widely tipped to top $3 a litre soon and could go up further.

The Taxpayers’ Union called on the Government to intervene on Monday morning.

“Petrol prices are surging past $3 a litre in many parts of the country. At a time when households are already struggling with the cost of living, the Government needs to wear some of the burden rather than lumping it all on motorists.”

“Kiwis can’t control wars overseas, but the Government controls how much tax we pay at the pump. When petrol hits three dollars a litre, it’s working families and small businesses that feel it first.”

“Reducing fuel tax is a proven way to support households when global fuel prices spike,” said Taxpayers’ Union executive director Jordan Williams.