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There’s a new “good to know” item for anyone planning to drive in Iceland in 2026. Starting January 1, 2026, Iceland is changing how it pays for road maintenance. If you’re renting a car for the Ring Road, the Golden Circle, or a full lap around the country, this update matters because it changes what you pay for road use and how it shows up in your travel budget.
Here’s the simple version: Iceland is moving away from collecting road taxes through fuel duties. Instead, the country is introducing a per-kilometer road usage charge that applies to all vehicles, including rental cars driven by tourists.
Why Iceland is switching to a per-kilometer road charge
For years, a big chunk of road funding came from fuel taxes paid at the pump. That system worked fine when almost everyone was buying similar amounts of fuel. But the real world has changed. Cars are getting more fuel-efficient, and electric vehicles keep growing in number.
The per-kilometer model is meant to be more consistent. The logic is straightforward: the more you drive, the more you contribute. It doesn’t matter whether your vehicle runs on gasoline, diesel, or electricity. Road use is road use.
What the new Iceland road tax means for visitors
If you’re traveling from abroad, the key takeaway is that yes, this applies to tourists. The charge is linked to the vehicle’s use of Icelandic roads, not the driver’s nationality or residency.
In theory, a per-kilometer system can feel uncertain if you don’t know how it will be calculated. The good news is that there is a published "from" national base rate, and once you understand the math, it’s easy to estimate.
How Reykjavik Cars applies the road charge
With Reykjavik Cars, the road usage charge is applied based on distance driven, starting from 6.95 ISK per kilometer (the national base rate). Your total depends on how far you drive during your rental period and any applicable rate details tied to the official framework and official administrative fees.
- The road charge starts at 6.95 ISK per kilometer, which is the national base rate for standard passenger vehicles.
- Depending on the vehicle selected, the timing and method of payment may vary. Specific instructions will be provided for each rental model. In some cases, it will be a daily rate; in others, it will be done by counting the total km driven plus admin fees.
What this approach really buys you is clarity. Do you want to detour to a hot spring, take the long coastal way, or add an extra day exploring the south? Go for it. Just keep in mind that every extra kilometer adds a small, consistent amount, so it’s simple to understand how route changes affect your total.
Ready to plan your 2026 drive with clear pricing from the start? Book your Iceland rental car with Reykjavik Cars and lock in your dates early.
What happens to fuel prices in 2026?
Because the old fuel duties are being removed, fuel prices are expected to drop. Estimates in current discussions suggest a reduction of around 80 ISK per liter (roughly USD 0.64 per liter). In simple terms, you'll pay slightly less when you refuel and a little more as a road-use fee, effectively balancing one cost with the other.
So if you’re doing trip math for 2026, think of it this way: fuel may be slightly lower, and road funding moves into a new, distance-based fee.
FAQ about Iceland’s mandatory road charge in 2026
When does the new road charge start?
The per-kilometer road usage charge is scheduled to begin on January 1, 2026.
How much is the per-kilometer rate?
For standard passenger vehicles, the national base rate starts at 6.95 ISK per kilometer (about USD 0.05 per km). Reykjavik Cars applies the road charge based on distance driven, starting from that base rate.
Does it apply to tourists and rental cars?
Yes. The charge applies to all vehicles using Iceland’s road system, regardless of where the driver is from.
Is the charge different for gas, diesel, and electric cars?
The idea of the new system is that all vehicles contribute based on distance, not fuel type. That’s one of the main reasons Iceland is making the change.
Where can I find official information?
You can read more through the official “Roads to the Future” information site here: vegirokkarallra.is.
