The expected move to dump the proposed regional fuel tax is a relief to Federated Farmers, which had lobbied vigorously against the tax.
The Government is expected to confirm this week that it will not be proceeding with the tax.
Federated Farmers' transport spokesperson, Donald Aubrey, says the tax would have been like having a dog with fleas, as rural people would have been effectively subsidising urban transport.
He says the problem with such a tax is that it asks people who will not directly benefit to pay.
Mr Aubrey says if it were introduced, there would need to be some system of policing fuel use, which could be a bureaucratic nightmare.