Petrol prices soar

The Federal Government was yesterday forced to deny FuelWatch was causing inflated petrol prices after the cost of unleaded fuel in the Illawarra rose by up to 12 cents a litre in 24 hours.

In the worst case, a Unanderra petrol station that was selling unleaded for 142.9 cents on Wednesday had increased its prices to 154.9 cents yesterday.

Albion Park Caltex was selling fuel for 156.9 cents yesterday afternoon while the price at most petrol stations around Wollongong was about $1.50.

Last week the average price in Wollongong was 145.2 cents and the peak price 147.3 cents.

The spike followed a similar one in Sydney on Tuesday night. Under the FuelWatch scheme announced by Prime Minster Kevin Rudd on Tuesday, petrol stations will be forced to publish prices 24 hours in advance to provide greater choice for motorists.

In Sydney yesterday, Federal Minister for Competition Policy and Consumer Affairs, Chris Bowen said the reasons for the fluctuations were unknown.

"At the moment nobody knows - nobody can explain (the price changes)," he said.

"The oil companies can't explain it. They say it is world oil prices. World oil prices are certainly the biggest impact on Australian petrol prices ... but ... world oil prices didn't go up just today, so why these big increases?"

The minister denied that the Government's FuelWatch announcement on Tuesday had caused a spike in petrol prices.

"Oh no, I think we see ... these types of variations," he said.

"If we saw a big variation like this under FuelWatch people would be able to beat the increase and go out and buy before the increase."

Mr Bowen said the national petrol commissioner Pat Walker would be granted the powers necessary to put downward pressure on prices.

He also welcomed the results of an NRMA BusinessWise survey showing FuelWatch would mean "substantial savings over the course of a year" for businesses.

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