The Australian Competition and Consumer Commission (ACCC) has found the gap between regional and city petrol prices has shrunk drastically.

The regulator today released its second quarterly report into prices, finding the average bowser price across Australia’s five largest cities had risen back to $1.33 a litre by the end of March.

Prices dropped below $1 a litre in some areas during the March quarter, the lowest they have been in real terms since 1999, before rebounding along with global oil prices.

ACCC chairman Rod Sims said there had been a silver lining for regional motorists though, given the 17.5 cent a litre December price gap previously criticised by the commission.

“The gap between regional and city prices is now only 1.9 cents a litre, whereas it was up around 17, 18 cents a litre a couple of months back,” Mr Sims said.

“That had a fair bit to do with a very low pass-through of reduced world oil prices into petrol prices in rural areas.

“Now that pass-through has occurred. Indeed it’s occurred to such an extent where the gap between rural and city prices is probably less than it normally is.”

Mr Sims warned the price difference was unlikely to remain at its current level.

“We think the longer-term gap is 5 or 6 cents a litre. So, when it was around 17 or 18, that was three times what we’d expect. And we think there will be a little bit of a correction,” he said.

At a national level, the ACCC said petrol prices had been relatively stable for some time.

“They’ve been trading about $1.30 for the last month or two, which is good news for consumers that some of that lower price has been locked in, and of course oil prices are probably around their long-term average now,” Mr Sims said.

Extracted in full from ABC.