Planning rules could be contributing to high petrol prices

The government should explore whether the ACT's planning laws are favouring major petrol outlets and contributing to higher prices in the ACT, a Legislative Assembly inquiry has heard.

A Legislative Assembly committee investigating the ACT's fuel prices on Thursday heard evidence from the Australian Competition and Consumer Commission at the inquiry's third public hearing.

Matthew Schroder, from the commission's access and pricing branch, said the commission was aware Canberra's prices were higher than they should be.

He said the most significant indicator of higher petrol prices was a lack of competition.

Prices were also affected by the volume of petrol sold, distance and location factors and the impact of non-fuel sales.

Mr Schroder said the relative lack of discounted and independent fuel outlets in Canberra  was contributing to higher prices.

But the location of petrol stations in Canberra, which are rarely on major arterial roads and therefore drivers are less likely to see price signs, also make the market less competitive.

"[In similar sized] cities .. as you're coming into town you will see a bunch of petrol stations," he said.

"When I moved to Canberra it surprised me ... it was really difficult to find a service station ... until I understood that they were in the town centres."

He said while he wasn't suggesting Canberra should change its planning laws it came down trade off between amenity and efficiency of petrol markets.

The commission's Gary Dobinson, from the fuel prices and market analysis section, said  weekly price cycles generally did not occur outside of the five major cities - with a few exceptions.

Until about six years ago Canberra also experienced the weekly fuel cycles.

The reason the price cycle ceased was not clear, but the hearing heard it could have been due to a number of petrol retailers pulling out of the market.

To try to reduce prices,  Mr Schroder suggested making sure planning rules were not too restrictive and favouring the big players.

He said making petrol stations and their prices more visible along major thoroughfares could also increase competition.

But he said prices should be looked at over a longer time period, with the average difference in petrol prices over the past five years between Canberra and the other capital cities seven cents - less than it has been more recently.

Mr Schroder said over the past 10 years Canberra's prices have been lower than Hobart and Darwin.

He rejected the perception the commission had failed in the petrol prices space and was a "toothless tiger".

"I think it's a misunderstanding of our role," he said.

He said the commission's role was not to set petrol prices, but to ensure there was no illegal activity as well as monitoring and reporting on the markets.