The Government is "looking towards" announcing whether it will extend the cuts to fuel excise duty (FED), road user charges (RUC), and public transport fares before the end of the year.
The subsidies, which are due to end on January 31, are currently being discussed by Cabinet, Transport Minister Michael Wood told Newshub.
"Cabinet is currently considering the final arrangements around those reductions around FED, RUC and public transport and we will be able to confirm the approach there very soon," Wood said at Parliament on Tuesday.
Asked if there will be an announcement before the end of the year, Wood said: "I think that is what we are looking towards."
"We know people want certainty before we get into that summer holiday period… We are discussing that phase-out period, but in terms of what we decide, we will be able to confirm that soon."
The Government first cut RUC, took 25 cents off FED, and halved public transport fares in March to help Kiwis struggling with the rising cost of living. The scheme was extended in the May Budget and then again in July.
The Consumer Price Index for the June quarter showed annual inflation of 7.3 percent, the highest in 32 years. It dropped down by only 0.1 percentage points in the September quarter, but is forecast to rise again to 7.5 percent in 2023.
A Newshub-Reid Research poll last month found New Zealanders back the Government to extend the subsidies. The results show 81.4 percent of Kiwis believe the fuel tax cut should be extended, 12.7 percent said it shouldn't be and the rest didn't know.
However, the scheme's costly. Extending the cuts to FED and RUC from August to January was estimated to cost the Government $589 million. Overall, the Ministry of Transport believes it will cost about $1.3 billion.
There have been calls for the Government to provide certainty to Kiwis about the future of the subsidies prior to January, including from Green Party co-leader James Shaw.
"I think it is important for people to be able to plan, but also for councils," he said. "I think any early decision on that and being able to get that out into public will be more useful for everyone."
Transporting NZ chief executive Nick Leggett wants the Government to keep the fuel excise tax off.
"The transport industry, which of course runs diesel trucks, has had a discount on road user charges and of course, there is that public transport discount as well," Leggett told AM in November.
"Now, that package is expensive, but our view is inflation is still going to be high early next year and until such time as households get a reduction in their cost of living costs, the Government should keep this package in place."
Treasury officials warned the Government earlier this year not to extend the policy to January as the reductions would create a precedent or expectation that "sits in tension" with the Government's climate goals.
The Government's Crown Accounts for the year to June 30, 2022 showed tax take from petroleum fuels excise and duty fell from $2.1b in 2021 to $1.7b in 2022, while road and track charges decreased from $1.9b to $1.8b. This was attributed to the FED and RUC cut.
