Motorists face spending an extra three cents at the pump as fuel companies passed on the Government imposed excise tax from today.

BP, Caltex and Z lifted their prices by three cents a litre - to about $2.20 per litre – in line with the Governments three-cents-a-litre excise tax which sees all three absorbing the accompanying extra GST of just under half a cent per litre.

Current petrol prices from various fuel companies throughout Tauranga.

The excise increase pushes total tax on petrol to about 92.3cents, or 42 per cent of the pump price. This includes about 64.1cents in excise and the rest in GST.

The tax increase follows a two cent rise last August and is the first of the three cent increases set out for the next three years. All proceeds go into the National Land Transport Fund paying for roads and public transport.

BP New Zealand external affairs manager Jonty Mills says it is important to distinguish to motorists that this is a Government tax which has been passed through the supply chain to the pump.

He says the company will pass on to motorists all of the basic three cent rise while absorbing the extra GST on top of that.

"It is important to distinguish between this government-implemented tax increase and a normal market increase which would be influenced by components such as the price on the international market, or the exchange rate.

'From a BP perspective we have absorbed the GST component of that which is .45 of a cent. This is quite significant.”

Gull retail manager Graham Stirk says the discount oil company is still assessing whether they can absorb some of the tax rise.

'We have held prices at this stage and just review this on a daily basis.”

Graham says they might be able to do something in the short term but is unsure for the long term future.

Signalled back in December the tax increase comes as a result of a Government shortfall in the National Land Transport Fund obtained from petrol tax because cars have become more fuel-efficient.

Automobile Association Petrolwatch spokesperson Mark Stockdale says the three cent increase is a sensible approach instead of waiting a few more years and targeting motorists with a nine cent increase.

'That would have been too much too swallow. It's easier for motorists to manage.”

The increase is in line with rises in previous years and is adjusted to keep up with inflationary increases in the cost of road maintenance and road building.

Despite not being included in the tax increase, diesel users have been slapped with a 10 per cent increase in road user charges, something which is unfair, says Mark.

'Unfortunately it is 10 per cent and the AA will say that's too high. It really should be five per cent. Once again diesel motorists are being discriminated in the Government tax system.”

The money collected from the excise tax will go towards subsidising public transport, road safety upgrades and road safety enforcement.