"We strongly urge those holding Phillip to release him immediately and without harm. His continued detention serves the interests of no one," Peters said in a statement.
Mehrtens was providing vital air links and supplies to remote communities at the time of his abduction, the New Zealand government said.
"We know that just before Christmas, Phillip was able to contact some friends and family to assure them that he is alive and well, however we are still concerned at the length of time he has been held," Peters said.
Peters also said that New Zealand government agencies have been working extensively with the Indonesian government over the last year to secure Mehrtens' release. New Zealand Ministry of Foreign Affairs and Trade officials have also been supporting Mehrtens' family.
"There can never be any justification for hostage-taking," Peters added.
New Zealand's previous prime minister, Chris Hipkins, who was replaced following general elections last October, had previously called for Mehrtens' release in August, six months after the New Zealander was abducted.
The rebels who kidnapped Mehrtens are from the West Papua National Liberation Army (TPNPB). The group, designated as a terrorist group by the Indonesian government, had previously demanded that Indonesia recognize "Papuan independence" in return for Phillip's release. According to the Indonesian Army, armed separatists ambushed soldiers searching for Mehrtens in April, killing at least one. (AFP)