The program, introduced in 2010 after Murray Valley and Murrumbidgee Valley national parks were gazetted, allowed locals to collect firewood for heating in a region with little access to natural gas.
Residents at Friday's protest called on the state government to reverse the decision. Jane Mathers, who lives on a property outside Tocumwal, said she relies heavily on firewood from Murray Valley National Park.
"I couldn't live without it, especially in the winter," she said. "We can't afford the electricity; we are pensioners."
Mathers said her quarterly electricity bill was about $1,000, and losing access to firewood would be a big blow to her and her husband. "We can't afford to live on anything less than what we've got now," she said.
Murray Dravitziki, a Mathoura resident, installed a fireplace two years ago at a cost of about $3,500. "Now we are just sort of up in the air as to where we go from here," he said.
The ABC understands there are no plans to reintroduce firewood collection in the two parks after this season.
Decline in timber
The NSW National Parks and Wildlife Service (NPWS) said the program was ending because of the quality and quantity of wood available. In a statement, a spokesperson said the program was placing significant pressure on the health and survival of native plants and animals.
"Fallen timber is a critical part of healthy forest ecosystems," the spokesperson said. "It provides shelter, nesting sites, food sources and protection for a wide range of native Australian wildlife."