Fuel prices in New Zealand increased 4 cents per litre in June due to weakening of the New Zealand dollar and rising prices of commodities. Today, fuel prices rose again by another 3 cents along with the scheduled annual rise of petrol tax.

In most service stations, diesel prices went up by $1.50 per litre while 91 octane closed the month of June with a price of $2.16 per litre.

Mark Stockdale, spokesperson for AA PetrolWatch says people in New Zealand are paying almost 94 cents in petrol tax and GST per litre. The latest petrol tax increase, the price of fuel is just 4 cents below its record-breaking price in August 2012.

Out of the 94 cents increase, 53.5 cents is allocated to the National Land Transport Fund. The allocation will help cover the cost of road repairs, safety upgrades, enforcement and subsidies in public transportation. The petrol tax will also cover the cost of building new roads. Almost 10 cents per litre goes to coverage of motor vehicle accidents while the rest are miscellaneous and GST.

Stockdale says if vehicle owners do not want to pay more taxes, they should shop around for discounted fuel or take advantage of supermarket discounts like AA Smartfuel. Stockdale also said AA has noticed an ongoing regional price competition throughout New Zealand. Some service stations were found to charge motorists less than $2 per litre of petrol.

A falling New Zealand dollar exchange rate is bad news to motorists since it also means an increase in fuel prices and ultimately petrol tax. The Kiwi dollar dropped 3 cents against the US dollar. The Kiwi dollar traded at 84.60 Australian cents as of 5pm in Wellington.

The AA does not expect fuel prices to go any higher other since today's increase was due to the rise in petrol tax.