Cost of living: Chris Hipkins confirms Budget will have 'targeted support' for people who 'need it most' after ditching fuel tax cut

Prime Minister Chris Hipkins has revealed some more targeted cost of living support is on the cards after the Government announced it's ditching the fuel tax subsidy

Speaking to AM on Wednesday, Hipkins said the fuel excise duty (FED) reduction was initially introduced because "it was something we could do quite quickly to give New Zealanders a bit of extra support".

The cut to FED was estimated to reduce the cost of filling up a 40-litre tank of petrol by about $11.50 and around $17.25 for a 60-litre tank.

Hipkins said, however, the Government was clear the FED cut would end on June 30.

"We extended that out beyond the [May] Budget because, in the Budget, we wanted to be able to consider a range of more targeted measures to support people through the increased cost of living," Hipkins told AM host Ryan Bridge.

"Bearing in mind, there are other things that are happening; the Winter Energy Payment is about to kick in… there will be some more in the Budget that's about targeted support for those who need it most with the rising cost of living."

The Government first announced a 25-cent FED reduction in March last year. Initially, it was only meant to last three months but had since been extended multiple times.

At the time, Finance Minister Grant Robertson said the policy had directly helped Kiwis and brought inflation down by about 0.5 percent.