I just got an email from Blue, who I reserved a car with in July. Evidently there is a new road tax that is going into effect as of January 1 and they informed me that they will need to collect it. Can someone explain it?
Here is the text from the email:
Please be advised that the Icelandic government has instituted a new Road Tax applicable for all cars, effective from January 1st 2026. According to government officials the fuel prices on pump for petrol and diesel will decrease overall at the same time because fuel taxes are being removed.
As the Road Tax was only applicable for electric cars, hydrogen cars, and plug-in hybrid cars when you booked your rental car Blue Car Rental needs to collect the Road Tax fee for the Icelandic government. The Road Tax fee is 7 ISK per kilometer or 1550 ISK per day for rental cars. We at Blue Car Rental will collect the 1550 ISK Road Tax in advance to ensure transparency and convenience for our customers.