The prime minister has not confirmed if the Government will extend its fuel tax cut past the end of January.
Jacinda Ardern said this afternoon it's too soon to say whether the Government would extend the cut.
"We haven't yet decided what will happen at the end of January; we want to do that closer to the time, so we have a read on things like energy prices," Ardern said.
The cost of cutting fuel taxes has taken well over $1 billion out of the Government's coffers, and many are wondering if New Zealand can afford to keep it going.
Ardern said that while the policy is expensive, it's necessary for the many Kiwis who rely on individual transport.
"So many New Zealanders rely on individual means of transport, for a range of reasons and making that transition to alternatives takes time."
Ardern also highlighted that higher fuel prices make freight expensive, which "has an impact on all walks of life".
With more sanctions on Russian fuel coming up in 2023, the price at the pump seems like it will spike again, with many wondering if January is too soon to end the policy.
The prime minister said that the January date for when the fuel tax cut would end was based on data determining where inflation would start to ease - but said it was still too early to set anything in stone.
"Whilst most forecasters at this point believe we may have peaked and should start coming away, obviously, time will tell," she said.
The fuel tax cut was introduced as a part of the Government's actions to support Kiwis during the cost of living crisis. Other actions include half-price public transport and monthly payments for low-income earners.
Fuel prices have hiked up worldwide, with factors such as the war in Ukraine and Covid-19 driving up oil demand.