The head of Australia's competition watchdog says Brisbane's petrol market is "appalling" and is urging drivers to send a message to price-gouging retailers by shopping around for better deals.
Australian Competition and Consumer Commission chairman Rod Sims on Thursday rejected BP's bid to takeover Woolworths' petrol stations.
Mr Sims says the decision stems from a belief it would lead to nationwide price increases, which would impact significantly on Brisbane drivers, who already pay three cents a litre more than those in other major cities.
"It's an appalling outcome," he said.
"It reflects the fact that you've got a very concentrated market structure and not many discounters."
Mr Sims says BP charged an average of 1.5 to three cents more per litre for petrol than Woolworths.
"Our concern is that with BP controlling the prices of the Woolworths prices, there'd be higher prices for petrol," he told ABC Radio on Friday.
"I would've thought an easy one-to-two cents a litre more than they are now across Brisbane."
Mr Sims says BP also raises its prices faster during the up cycle and takes longer to lower them during the down cycle.
"We believe if the merger proceeds, you'll also have an even sharper and more irritating petrol price cycle," he said.
The ACCC's report into Brisbane's petrol market, released in October, found the higher prices had resulted in drivers paying $50 million a year more than those in the other major cities.
Mr Sims says the petrol companies have no reason for charging more.
"That's just them making more money at the expense of Brisbane motorists," he said.
"I was hoping that the shame of that might have an effect on them. It has not. That's unfortunate."
Mr Sims urged Brisbane drivers to buy petrol from cheaper companies like Woolworths, United and 7-Eleven.
"That will send a signal to those who are charging too much," he said.
