Accident Compensation Corporation is backing down from a plan to hike petrol levies, but will recommend increasing the cost of motor vehicle registrations to pay for a rise in road injuries.
The state insurer told the government to increase the road user levy in registrations by about $14 to $127.68.
However, it recommended the petrol levy stay at 6 cents a litre, after its plan to hike it by 1.9 cents received public backlash.
ACC chair Dame Paula Rebstock said it had enough funds to keep the petrol levy on hold, however the increase in registrations was necessary to pay for the rising number and cost of serious road accidents.
She said motor vehicle injury claims have increased by 6 percent for the past five years and costs by $100 million.
"Cost pressures from increasing claim numbers, serious injuries and medical costs - and the impact of pay equity and expected lower investment returns - mean the proposed recommendations must be retained to ensure the scheme remains fully funded."
The recommendations followed submissions from about 6000 New Zealanders.
ACC was also proposing to drop the average employer levy by 7 percent, but increase the earners levy by 2.5 percent.