An increased tax on cigarettes has helped push up the consumer price index for the March quarter, but that was tempered by lower petrol prices.
New data from Statistics New Zealand shows the average price of a 25-pack of cigarettes was now $28.79 following the 10 percent increase, which came into force on January 1.
It's helped increase CPI 0.2 percent along with higher food and housing-related costs.
The rise follows a 0.5 percent fall in the December quarter.
Consumer prices manager Matt Haigh says the higher prices were countered by lower prices at the pump and air fares.
The higher price for cigarettes and tobacco accounted for the biggest increase, up 9.4 percent in the March 2016 quarter. Excluding it, CPI showed a fall of 0.1 percent for the quarter.
Petrol prices were down 7.7 percent, with the average price for one litre of 91 octane at $1.69, compared to $1.84 in the previous quarter.
The cost of flying internationally dropped 12 percent, while the price of domestic travel fell 4.8 percent.
In terms of annual CPI inflation, it rose 0.4 percent in the year to the March quarter -- up from a 0.1 percent increase for the year to the December 2015 quarter.
Housing-related prices were the main factor in the increase, up 3 percent for the year. The increase was attributed to higher rents (up 2.3 percent) and newly built houses excluding land (up 5 percent).
Transport prices were down overall including a 5.1 percent drop in petrol prices. Not including petrol, the CPI showed a 0.7 percent increase in the year to March 2016 quarter.
Finance Minister Bill English believes the low inflation is helping families.
"We are in the unusual situation of having solid economic growth, more jobs and rising wages at the same time as very low interest rates and inflation.
"Households with mortgages have the double benefit of low cost of living rises and lower mortgage servicing costs, which will be particularly welcome in regions with increasing house prices," he says.
But the Green Party thinks otherwise, saying low inflation hides how the housing crisis is affecting people.
"Low oil prices mean the CPI is hiding the fact the cost of housing, especially rental housing in Auckland, is rising much faster than wages and other prices," finance spokeswoman Julie Ann Genter says.
"If your rent is going up 5 percent but you’re one of the almost 50 percent of New Zealanders who didn't get a pay rise last year, overall low inflation isn’t going to help you."
She says low inflation will make it likely the Reserve Bank will cut the official cash rate again, making the housing crisis worse.