The New Zealand government will lower the excise tax on fuel and halve public transport fares for three months to offset the increase in gasoline prices caused by the Ukrainian crisis, Reuters reports.

Gasoline prices in New Zealand, like the rest of the world, skyrocketed, as did the cost of food and construction, which contributed to significant inflation in the country.

Economists had expected inflation in New Zealand to exceed 7% this year, and do not rule out a peak above 8%.

The government also said it would cut fuel charges by 25 New Zealand cents.

It estimates that the changes will reduce the cost of filling a 40-liter tank of gasoline by more than NZ$11 ($7.46) and a 60-liter tank by more than NZ$17.

The government is also reducing tolls on diesel vehicles by 25 New Zealand cents.

ANZ Bank in New Zealand said government spending cuts could help bring down year-on-year inflation in the June quarter by 0.5 percentage points from the current forecast of 7.4%.