Wellington City Council spokesperson Richard MacLean told Newshub the council had been in early discussions with the Government, after Mr Bridges revealed the move. But Mr Lester denied it, telling The AM Show Mr Bridges needs to "get better sources".

"I want to clarify very clearly: We are not in conversations about a regional fuel tax in Wellington," he said, in direct opposition to the Wellington City Council spokesperson.

"We've talked about a range of options over the course of the last two years around the 'Let's Get Wellington Moving' project and how to fund it," he said.

"The range of options is that the fuel and excise tax pays for it from the National Land Transport Fund, but you can also pay for projects through rates."

Mr Lester said he has "absolutely categorically ruled out" the possibility of a regional fuel tax for Wellington, and said Transport Minister Phil Twyford will not be implementing one, which Mr Twyford has now confirmed.

Mr Bridges said he was told by a confidential source that the Wellington City Council had been in "secret talks" with the Government to have a regional fuel tax "where prices are already sky-high".

"The reality is this: at a time when you've got a $5 billion surplus, we don't need new taxes, the Government just needs to waste less of it," he said.

Wellington has been left with a "massive infrastructure deficit from the former government," said Mr Twyford. He said councils across the country are "desperate for funding to build much needed transport infrastructure".

Auckland's regional fuel tax was introduced on July 1. Aucklanders now pay an extra 11.5c a litre (including GST) under the tax.

Auckland Transport chief executive Shane Ellison told Newshub last month that the tax has been crucial to funding new projects in Auckland, such as the Matakana Link Rd project.

Petrol prices increased by 3.5 cents nationwide earlier in the month as an increase to the fuel excise tax came into effect. Further 3.5 percent increases will be introduced in 2019 and 2020.

A nationwide petrol boycott has been planned to take place on Friday, as Kiwis rally against increased petrol prices.

Newshub.