Fuel tax hikes set down for July have gone on hold for a year, but increases totalling 3.5 cents a litre are set to go ahead from next year.
Transport Minister Steven Joyce said fuel tax increases of 1.5 cents per litre due to kick in on July 1 would be deferred.
Because of the "ongoing economic impact" of the global recession and the Christchurch earthquakes, it made sense to hold off on the increase for another year, Joyce said.
However, fuel tax increases "in the order of" 2 cents per litre in 2012 and a further 1.5 cents per litre in 2013 would probably be needed.
The fuel tax has already gone up with 3 cents a litre hikes in October 2009 and 2010. The Road User Charge, which is levied on diesel vehicles, went up by 7 per cent on average in the October 2010 hike.
The tax increases were proposed as a replacement to a new regional fuel tax, which the National-led Government scrapped.
The tax is supposed to fund the Government's $11b roading plans. Joyce said deferral of the planned 1.5 cent hike would not "significantly affect" the roading plan.
1.5% equates to a rise of around 3.3 cents/litre based on current fuel prices. It's not much, but we should be grateful for small mercies, as the cost of petrol has been a significant driver of increased costs across the board in the last few months.
Unfortunately, there seems to be little other good news on the horizon with regard to fuel prices; at least not while the Middle East and North Africa remains a political powder-keg. We can but hope that there might be some downward movement, but we won't hold our breath!