Thrifty motorists were picking up E10 fuel for less than $1 a litre in Sydney on New Year's Eve as drivers prepared to hit the road en masse for the January holidays.

The cheapest price for E10 in Sydney on Thursday morning was at Punchbowl, where drivers were filling up for 98.8¢ a litre at the AP service station, and for 99.8¢ a litre at the nearby 24 Seven Fuel.

The cheapest unleaded petrol was being snapped up at BP Connect at Cabramatta and Metro Petroleum Narwee for 101.9¢ a litre, the NRMA said.

But NRMA spokesman Peter Khoury urged motorists to do their research and shop around, as there were large variations in fuel prices across the city.

The highest price in Sydney for E10 was 129.9¢ a litre, and 145.9¢ a litre for unleaded, according to the NRMA.

Mr Khoury said fuel prices were expected to rise in coming days, and he urged motorists to consider filling up now.

"We had forecast that prices would get to around these levels between Christmas and the new year, but then they will go back up again in accordance with the price cycle," Mr Khoury said.

"As to when, we don't know, which is why if people need to fill up, especially if you're in Sydney, get in now. If the price drops further it's not likely to drop by much, but it will go up, and we're not exactly sure when."

Mr Khoury said it was common to see the price difference between the cheapest and the most expensive service stations in Sydney to be upwards of 35¢ a litre.

"It's madness. The other alarming thing is, we're not talking one end of town to the other. Sometimes those gaps can be found in the same suburb," he said.

"As a rule, the cheapest service stations are the independents, and they tend to be found in pretty large numbers around south-western and western Sydney. If you're anywhere near there, do a bit of research and shop around because that's where you're going to find those dollar-a-litre prices."

Mr Khoury also said the most expensive service stations tended to be on Sydney's northern beaches, the north shore and eastern suburbs.

"There are fewer independents and there isn't as much traffic going through those areas, so there isn't as much opportunity for competition," he said.

The Transport Management Centre said heavy holiday traffic was expected on Friday, Saturday and Sunday and motorists should expect delays on roads around Sydney Airport, on the M4 and Great Western Highway towards Sydney from the Blue Mountains, and on the North Coast and South Coast.