Fuel Tax Better Than Road User Charges?

July 3, 2008

Petrol is more expensive than diesel because the former has a fuel tax levied on it and the latter doesn’t. But diesel powered vehicles pay Road User Charges instead.

The chair of the Road Transport Forum, Steve Doughty told Mary Wilson on Checkpoint last night that he’d be keen on an investigation to determine if fuel tax might be better than RUCs.

My initial reaction to this is positive. RUCs are based on distance, the further you go the more you pay. That sounds fair enough until you work out that vehicles which travel further efficiently pay more than those which travel a shorter distance inefficiently.

Fuel taxes, are consumption taxes so the more you use the more you pay and there is a financial incentive to use it efficiently.

Doughty reckons that the administration on RUCs costs around $100 million a year. That sounds high but there must be a lot of paper work involved with all the vehicles each with individual RUCs which need to be purchased and processed.  It would be simpler and cheaper to pay fuel tax at the pump as we do for petrol.

Changing from RUCs to fuel tax might be more expensive for people with diesel powered cars who drive short distances. But it would definitely be easier and, by reducing the adminsitration,  possibly cheaper for every vehicle covering long distances.

It would also relieve traffic police of the task of checking RUCs are up to date and writing tickets if they’re not 🙂


%d bloggers like this: