Motorists may be spared a 2-cent-a-litre rise in petrol prices from higher ACC levies, but still face a 4c increase as a result of higher excise taxes.

The Government looks set to knock back a request from the Accident Compensation Corporation to increase its levy on petrol by almost 2 cents a litre.

ACC said it wanted to increase its levy on petrol by 1.9 cents a litre and raise the average annual levy on car registrations from $113.94 to $127.68 a year.

The increased charges would apply from July next year and would represent a price rise of 12.1 per cent on its existing levies.

TOM LEE/STUFF ACC will have to present its case for higher levies to ACC minister Iain Lees-Galloway, who will make a recommendation to the Cabinet.

But the levy changes would need to be approved by the Cabinet, and ACC Minister Iain Lees-Galloway said ACC would need to make a "very, very strong case for why they think now is the right time for petrol prices to go up".

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"We know families across the country are facing rising living costs. When Cabinet comes to consider these proposals that is something that we will definitely be taking into account," he said.

Lees-Galloway said the Government would take any case ACC made "on board" but signalled its ear might lie elsewhere.

"I can assure everyone that this Government is very well aware of the cost pressures that New Zealanders face. We are able to take that into account when we make our decision about ACC levies and we will," he said.

PETER MEECHAM/STUFF ACC chairman Paula Rebstock says low interest rates and fears for higher inflation mean ACC needs to adjust its levies now.

The price of petrol went above $2.40 in many parts of the country for the first time this week on the back of rising oil prices.

There is more pain in store at the pumps with a rise in excise tax expected to push up the price of petrol by 4c a litre from Sunday.

ACC chief customer officer Emma Powell said it had proposed spreading its desired motor vehicle levy hike between a higher petrol levy and increased registration costs.

That was because it believed it was fair that "the more people use the road", and the more exposed they were to injuries, the more they should pay, she said.

"There are other ways we could obviously collect that, and that might mean you would put all of it onto the registration. There are different ways we can approach it."

ACC cited increased costs for care and support workers "resulting from the pay equity settlement agreed by Government" as one of the reasons why its levies needed to rise.

Powell could not say how large a factor that was behind its ask-for levy hike. "We do know that there were increases of up to 50 per cent in some of those workers' wages."

ACC was not making any judgments at all about policies that had impacted its costs, she said. Rather it was just letting people know "where all of the cost drivers sit", she said.

ACC Average ACC motor vehicle levies have plunged over the past few years but could now creep up depending on how the Government views the insurer's proposals.

ACC also wants to increase levies paid by workers by 2.5 per cent, from the existing rate of $1.21 for every $100 of liable earnings to a new rate of $1.24.

But levies on employers should fall 6.9 per cent, from $0.72 to $0.67 for every $100 of liable earnings, it has suggested.

ACC chairman Dame Paula Rebstock said the levy increases were required because of a growing number of injury claims, and cost pressures.

"Since we last adjusted levies in 2016, the number of claims for injuries has grown by 6.4 per cent, with more people than ever needing our support," she said.

Its costs had been increased by rising medical costs, the pay equity settlement, the introduction of free doctor visits for all children aged under 14, and increases in weekly compensation claims, ACC said in a statement.

TOM PULLAR-STRECKER/STUFF ACC says more claims and higher costs are behind proposed rise in levies.

ACC's coffers have been boosted by very strong investment returns in recent years.

But Rebstock said lower interest rates on its investments and forecasts of higher inflation were expected to have a significant impact in future.

"These factors need to be reflected in the levy rates now to ensure that we can support our clients' needs throughout their lifetime," she said.

People could make submissions on the proposed changes before ACC's board made its final recommendations to Lees-Galloway for a decision, Rebstock said.

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