WELLINGTON, Aug. 31 (Xinhua) -- The New Zealand government has canceled a planned fuel excise hike for 2027 to help ease cost-of-living pressures while delivering lower taxes for New Zealanders, senior officials said on Monday.

People fill their cars with fuel at a gas station in Auckland, New Zealand, June 30, 2023. (Photo: Xinhua)

A 12 cents-per-liter increase scheduled for Jan. 1, 2027 would be scrapped. The next increase of 5 cents per liter will instead take effect on Jan. 1, 2028, with three further 5-cent increases at six-month intervals. Equivalent increases to road user charges will also be delayed until 2028, Transport Minister Chris Bishop told a press conference.

"Canceling next year's fuel excise increase and spreading the change over time from 2028 will give Kiwis more time to recover from the period of post-COVID economic pain and recent uncertainty in the Middle East," Finance Minister Nicola Willis said in a statement.

Bishop said transport project costs had risen by as much as 45 percent since 2020, while fuel excise had remained frozen and fallen about 20 percent in real terms.

The government will top up the National Land Transport Fund to offset lost fuel excise revenue, at an expected cost of 1.476 billion NZ dollars (about 870 million U.S. dollars) over the forecast period, he said.

The cost will be partly offset by a 450-million-NZ-dollar fuel response contingency established through Budget 2026, according to the government.