New Zealand halves public transport fares as fuel prices soar

The government of New Zealand has announced that it will halve public transport fares for three months from the beginning of April as part of a cost-of-living package to offer relief from the global energy crisis triggered by the war in Ukraine.

The government is also cutting petrol excise duty and road user charges which are levied on diesel vehicles by 25 New Zealand cents  a litre, with the changes coming in from midnight last night.

Petrol prices around the world have risen sharply since Russia’s invasion of Ukraine. In New Zealand, standard unleaded petrol has gone up 15 percent since the start of the year and is expected to continue to climb.

“We cannot control the war in Ukraine nor the continued volatility of fuel prices but we can take steps to reduce the impact on New Zealand families,” said Prime Minister Jacinda Ardern.

She added: “In the long term we need to build greater resilience into our transport system so we are less vulnerable to spikes in the price of petrol, but for now halving the cost of public transport will provide some families with an alternative to filling up the tank.”

The estimated cost of the fuel tax cuts over three months is NZ$350 million (US$237.5 million). This will mean reduced revenue for the National Land Transport Fund, which funds investment in roads and other transport infrastructure.

“We will be meeting the costs of this through savings and reprioritisation from the COVID Response and Recovery Fund,” said Finance Minister Grant Robertson. He said this would mean investment into transport infrastructure could continue, without having to cut projects.

Ireland reduces public transport costs

Elsewhere, the Irish government last week announced the first step in the implementation of a programme to reduce public transport fares which was outlined by Minister for Transport Eamon Ryan in February. The initiative aims to tackle the increasing cost of living and help meet Ireland’s climate objectives.

Taxsaver fares on all subsidised public transport services are to be reduced by an average of 20 percent from the beginning of April. The reduced commuter ticket scheme fares apply to customers on all subsidised Public Service Obligation (PSO) public transport services, including those provided by Iarnród Éireann, Bus Éireann, Dublin Bus, Luas and Go-Ahead Ireland.

Ryan commented: “[This] marks the first step in the roll-out of these fare reductions. In April and early May, we will be going further by rolling out the average 20 percent fare reduction on all PSO services for the travelling public until the end of 2022, as well as introducing the Young Adult Card in May, which will reduce fares for young people under 24 by a further average 50 percent.

“These reduced fares will put money back into people’s pockets and will benefit hundreds of thousands of people across the country who use PSO public transport every day. They also have the added benefit of accelerating our shift to more efficient and affordable public transport and moving us away from a reliance on private transport.”

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