31/08/2017 1:45 PM AEST | Updated 31/08/2017 1:45 PM AEST

Petrol Prices The Cheapest In 15 Years, But Should Be Even Lower

Petrol cheapest since 2002 but service stations still running big margins.

What you'll be happy to hear: petrol in 2017 Australia is the cheapest it's been, in relative terms, since at least 2002.

What you may not be happy to hear? Prices could be even lower, but service stations are still enjoying big margins at the bowser.

The Australian Competition and Consumer Commission has published a report on Australia's petrol industry, looking into prices and how they've changed in recent times.

The average petrol price in Australia's capital cities in the June quarter was 125.2 cents per litre, down nearly four cents from the March quarter, with Brisbane having the most expensive capital city petrol in the country.

Across the 2016-17 financial year, average petrol prices were 122.6 cents per litre, which was a slight uptick from 2015-16, but the ACC reports these prices "were at their lowest levels in real terms since 2001-02".

Annual average retail petrol prices in the five largest cities in nominal and real terms: 2000-01 to 2016-17

That's good news for people who need to fill up the car with expensive fuel, but the ACCC said retailers are still adding big margins to the price of petrol, meaning prices could be even lower than they are now.

"While motorists are enjoying the cheapest petrol since 2002, we believe prices should have been even lower given the continuing high gross retail margins," ACCC Chairman Rod Sims said.

"We encourage people to use fuel price apps to locate petrol stations in their area with relatively lower prices."

The ACCC reported that, while petrol prices were the lowest in nominal terms since 2002, margins added to that petrol by retailers were the highest they had been since the commission began monitoring that statistic in 2002. In 2016-17, gross retail margins in Melbourne and Perth -- at 12.3 and 12.0 cents per litre, respectively -- were the highest in real terms since 2002, with average margins at 11.7 cents per litre across the five largest capital cities.

The ACCC said high margins may be partly due to "regulatory and compliance costs", but that this explanation does "not fully explain the sharp increase in margins."

Annual average retail margins in the five largest cities in real terms: 2002-03 to 2016-17

"Prices at the pump in 2016-17 are reflecting the relatively low international price of refined petrol which fortunately is a result of the OPEC cartel failing to successfully restrict the supply of crude oil," Sims said.

"Of the price paid at the bowser, 42 per cent is the international price of refined petrol. Another 42 per cent is taxes (i.e. GST and excise)."

Prices in regional areas were even higher, with the ACCC expressing concern over prices in Launceston, Armidale and Cairns. Sims said new petrol retailers entering Australia were helping give consumers more choice and ability to shop around for cheaper prices, and encouraged buyers to keep their eyes open for good deals.

"Competition is driven by the willingness of motorists to shop around for the best price. For example, in Cairns, motorists that shop around can find petrol that is consistently around 10 cpl lower than the average," he said.