Lower RUC rate for PHEVs

Cabinet has agreed to a reduced rate of road-user charge (RUC) for plug-in hybrid electric vehicles (PHEVs).

Owners of PHEVs will be eligible for the lower rate of $38 per 1,000km when all light electric vehicles (EVs) move into the RUC system from April 1. 

“Having a reduced RUC rate for PHEVs recognises that these vehicles use both petrol and have a battery to power the vehicle,” says Simeon Brown, Minister of Transport.

“This change seeks to balance the need for these vehicles to fairly pay for the use of the road and the variable range of fuel efficiencies within PHEVs. 

“Not having a reduced rate would mean they would be required to pay a full RUC rate and then claim back any petrol excise used, which would have been administratively difficult and open to fraud.

“I asked the select committee to test the government’s earlier decision to set the discount for PHEVs from the full RUC at 30 per cent. The government has agreed this should go further given there are a range of PHEVs with a range of fuel efficiencies.”

Brown emphasises the reduced RUC rate for plug-in hybrids is a temporary measure to lessen distortions while the government gets to work on “transitioning the entire vehicle fleet to the road-user charges system and away from fuel excise”.

He adds: “Currently, there’s variability in what different vehicles pay in the RUC and fuel excise-duty system as highlighted by this issue. 

“Increased fuel efficiency of vehicles – and the rise of EVs, hybrids and PHEVs – has created variances in what motorists pay for use of the road. 

“This has meant that less fuel-efficient vehicles, often owned by low-income households, end up paying more in excise duty than owners of later model, more fuel-efficient vehicles.

“The Act-National coalition agreement commits the coalition government to introduce RUC for all vehicles so all motorists pay the same amount to use the road based on distance and weight rather than what type of fuel powers their vehicle’s engine.”