Under the scheme, service stations will have to declare their petrol prices a day in advance, and the prices will be available to consumers on a website or by text message.

Assistant Treasurer and Minister for Competition Policy Chris Bowen says that the scheme should lower prices by about two cents per litre.

"What we didn't expect was that the Liberal Party would so quickly dismiss a plan and a policy to deliver real benefits to Australian motorists," he said.

"All the evidence from Western Australia, where this scheme has been in operation with the support of both political parties for the last eight years, is that it delivers real benefits to motorists."

There has been a mixed reaction to the Government's plan to introduce a fuel price monitoring system.

The president of the NRMA, Alan Evans, said the scheme has worked well in Western Australia.

But others, like David Cumming from the Royal Automobile Club of Victoria (RACV), believe the monitoring system puts independent retailers at a disadvantage.

The Federal Opposition's consumer affairs spokesman Luke Hartsuyker yesterday said there was doubt about whether Western Australians are better off as a result.

"We welcome any proposal that is going to provide concrete savings to motorists," he said.

"But the FuelWatch system certainly hasn't delivered guaranteed reductions for motorists in Western Australia."

But Chris Bowen says that is not happening in Western Australia, where the scheme has been running for several years.

"There will always be cheaper days to buy petrol ... the evidence from Western Australia is that there is still a petrol cycle, it lasts longer and is not as volatile," he said.

Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel says an ACCC report did not find any evidence to suggest FuelWatch led to an increase in prices in Perth relative to the eastern seaboard.

"There is some evidence to suggest that on average it led to a decrease of between one and two cents a litre, but as I have always emphasised it's far more important to give them [motorists] power to understand when and where they can buy petrol at the cheapest price," he said.

He says consumers will know when prices are going to increase.

"They'll also know when they're going to decrease and they can therefore defer their buying until they get to their lowest points," he said.

-abc.net.au