Iran war: Chris Bishop says fuel crisis will force major rethink of transport plan - including fuel tax hikes

Monday, 23 March 2026

Transport Minister Chris Bishop is no longer committing himself to hiking petrol taxes if elected for another term as he says the fuel crisis forces a major rethink of the wider transport programme.

Bishop was adamant in early March that the three fuel tax hikes in 2027, 2028, and 2029 - deferred from this term already - were crucial for the Government to afford its wider land transport programme.

“There have been many decisions made in the last two years through the National Land Transport fund that rely on petrol tax increasing on the first of January 2027 and 2028 and 2029 as well,” Bishop said on March 5.

But on Monday morning he was not so sure, saying the increases in the cost of fuel was prompting reassessments of “lots of things” within Government.

Read more:

• Iran war: How much could you save by ditching the car? Our calculator crunches the numbers

• Government loans and private investment to add 2500 EV chargers, doubling NZ network

• Iran war: Government leans on seven-week fuel buffer as AA urges restraint

“We are working our way through our transport commitments, and clearly there's been a material change in the situation in the last few weeks,” Bishop said.

“I think you have to reassess commitments in light of changing situations. That's the plan at the moment, and when that plan changes, will tell you. But clearly, the fuel price increases are prompting reassessments of lots of things inside Government.”

He would not be drawn on whether that would mean the cancellation or deferment of new roads in the ultra-expensive Roads of National Significance programme.

Petrol taxes and Road User Charges (RUCs) are designed to fully fund New Zealand roading network but haven’t been able to keep up with rising construction costs in recent years, leading to an increasing share coming from general taxation. Fuel taxes are charged at a flat rate on each litre of petrol or kilometre driven within the RUCs system, meaning they don’t go up with inflation.

Bishop noted that the higher cost of diesel in particular would make it more expensive to construct roads and to fund public transport.

“Diesel is a major input into construction of roads, and also road maintenance. It's also, by the way, a major component of the cost of public transport….around 20% of our bus fleet is electric, 80% is diesel, ” Bishop said.

Bishop said he was meeting with public transport authorities on Monday morning to work out how the impact of higher diesel prices and heightened demand could be managed.

He declined to commit to public transport not getting more expensive as a result of higher diesel prices.

The Green Party wrote to the Government on Monday morning offering their support to make public transport free.

The Post last week reported a drop in public transport use in Wellington.

Greater Wellington Regional councillor Tom James, who is deputy chairperson of the Public Transport Committee, said it showed fares have been too high. The decline in bus use only started after the last government-mandated fare increase, he said.

“To help reduce demand on fuel, the Government should decrease fares - the more people on our buses and trains, the fewer queuing at the pump.”

Finance Minister Nicola Willis said her focus was making sure there was enough capacity on public transport for the amount of people choosing not to drive.