Starting in 2026, Iceland introduced a new road usage system called Kílómetragjald (kilometer fee). Instead of paying road-related taxes mainly through fuel, drivers now pay based on how much they actually drive.

This means that every kilometer driven on Icelandic roads is now subject to a fixed fee.

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How much is the kilometer fee in Iceland?

For standard passenger vehicles, the fee is approximately:

• ~6-7 ISK per kilometer

The exact rate can vary depending on vehicle type, with heavier vehicles typically paying more.

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Example

• 100 km drive → ~600–700 ISK
• 1,000 km road trip → ~6,000–7,000 ISK

This makes the cost directly linked to distance rather than fuel consumption.

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Who has to pay Kílómetragjald?

The system applies broadly to all road users in Iceland, including:

• Local residents
• Tourists
• Rental car users
• Electric vehicles
• Petrol and diesel cars

There are no major exemptions—if you drive, you contribute.

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How does it work for rental cars?

If you’re renting a car in Iceland:

• The rental company records your mileage
• The fee is calculated based on distance driven
• You pay either during or at the end of your rental period

In many cases, the charge is automatically added to your final bill.

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Why was the system introduced?

The introduction of kílómetragjald reflects a shift in how Iceland funds its road infrastructure. Key reasons include:

1. Fairer distribution of costs

Drivers now pay based on actual road usage rather than fuel consumption alone.

2. Inclusion of electric vehicles

Previously, electric cars contributed less to road funding due to the lack of fuel taxes. This system ensures all vehicles contribute.

3. Long-term infrastructure funding

Maintaining roads in Iceland is costly due to harsh weather conditions, volcanic activity, and low population density. A distance-based system provides more stable funding.

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What happened to fuel prices?

With the introduction of kílómetragjald:

• Fuel taxes were reduced
• Fuel prices dropped by approximately 80–95 ISK per liter (at the time of introduction)

This change offsets part of the new cost, although the overall financial impact depends on how much you drive.

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Is driving in Iceland more expensive now?

The answer depends on usage:

• Short-distance drivers may notice little difference
• Long road trips can become more expensive due to accumulated kilometers
• Electric vehicle users now pay more than before

Overall, the system shifts costs rather than dramatically increasing them for everyone.

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What does this mean for travelers?

If you’re planning a trip to Iceland:

• Expect an additional cost tied to your itinerary
• Longer routes (e.g., full Ring Road) will increase total expenses
• Checking distances in advance becomes more important

However, the system is straightforward and predictable, making it easy to estimate costs before traveling.

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Key takeaways

• kílómetragjald = pay per kilometer driven
• Applies to everyone driving in Iceland
• Average rate: ~6–7 ISK/km
• Fuel is cheaper, but distance now matters more
• Particularly relevant for road trips and rental cars

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The introduction of kílómetragjald marks a structural change in how road usage is paid for in Iceland. Rather than relying on fuel consumption, the system focuses on actual usage, aligning costs more closely with distance traveled.

For visitors and locals alike, it doesn’t change the experience of exploring Iceland—but it does change how that journey is priced.