MAJOR supermarket chains have caused the massive gap between Melbourne and Warrnambool petrol prices, the state's peak automotive lobby group has claimed.
Domination of the petrol market by Woolworths and Coles has been cited by the Victorian Automobile Chamber of Commerce (VACC) as the reason why south-west towns and cities were missing out on lower petrol prices enjoyed by city motorists.
Most Melbourne service stations were charging about $1.23 for unleaded yesterday while Geelong motorists paid $1.29, roughly 20 cents less than most south-west petrol retailers.
VACC executive director David Purchase said metropolitan prices were artificially low as major retailers attempted to squeeze independent outlets.
He claimed Warrnambool's prices were closer to the real value of unleaded fuel.
"Metro prices are out of step with the rest of the state. Fuel prices in regional areas appear to be high in comparison, however, in reality they are around the price we would normally expect to pay in cities," Mr Purchase said.
"Australia's fuel prices are determined by a complex combination of factors including world oil prices, the Australian dollar and transport and delivery costs. However, the retail prices at the pump are really determined by Coles and Woolworths and their oil company partners, Shell and Caltex, respectively."
Mr Purchase said the supermarkets controlled more than 50 per cent of the retail fuel industry and led the way on pump prices.
"Independent service station owners have no choice but to follow their pricing even if it means they have to sell at a loss," he said.
Prices in Warrnambool, Hamilton and Portland have remained largely static for the past three months, hovering close to the $1.50 per litre mark.
Most Melbourne service stations cut petrol prices significantly four weeks ago, to the point where few operators are selling petrol for more than $1.30 per litre.
RACV fuel spokesman Michael Case said while international oil prices had fallen during the past fortnight, there was little explanation as to why the price cycle had been resolutely low.
In response to the urban service station price cut, Warrnambool service stations have eased unleaded prices somewhat, reducing the retail value to $1.46 per litre during the past week.