Temperatures around the state were expected to peak on Tuesday, with forecasts of more than 40degC across western Sydney and in regional NSW.
Some communities have decided to cancel or postpone their fireworks displays, including Armidale in the state's north and Huskisson on the state's south.
More than 250,000 people have signed a petition calling for the Sydney fireworks to be scrapped, with funding redirected to drought and bushfire relief.
Mr Barilaro on Monday echoed those calls.
"The risk is too high and we must respect our exhausted RFS volunteers. If regional areas have had fireworks banned, then let's not have two classes of citizens. We're all in this crisis together," he said on social media.
However, City of Sydney spokeswoman Tanya Goldberg says the council is of the "firm view" the event should proceed.
The city's famous celebrations are expected to attract one million people to the harbour foreshore and generate $A130 million ($NZ135 million) for the NSW economy.
Premier Gladys Berejiklian has said if the RFS and experts say it is safe for fireworks to go ahead, then they should.
RFS Commissioner Shane Fitzsimmons on Sunday said he couldn't foresee the New Year's Eve efforts being compromised by a total fire ban.
But residents were warned to shelve their own private fireworks plans.
MELBOURNE EVENT TO GO AHEAD
Melbourne's New Year's Eve fireworks display were also set to go ahead, amid heightened fire danger as extreme heat scorches Victoria.
The city is expected to reach 43degC on Monday before dropping to a forecast maximum of 21degC on New Year's Eve, as fires threaten lives and homes in the state's East Gippsland region.
Melbourne Lord Mayor Sally Capp says the city's fireworks show has been given the go-ahead because of cooler conditions forecast for Tuesday.
