Assistant Treasurer and Consumer Affairs Minister Chris Bowen told ABC1's Inside Business program that FuelWatch "is just one step, we're not just concentrating on the retail sector."

Under the scheme, which is to be introduced in December, petrol station operators will tell the ACCC what the next day's prices will be, the regulator will tell consumers what to expect, and prices willl be locked in at the bowser for 24 hours.

Independent service station operator Paul Andronicou, of Fast Fuel in suburban Melbourne, says FuelWatch should be aimed at the oil companies and major supermarkets with discount fuel shopper dockets because "they're the ones that sell most of the fuel in the market and they set the price."

Another independent, Peter Anderson of APCO, which has 19 sites in Victoria, says under FuelWatch "we won't lead the market down as low. We'll be very cautious going down to the bottom end of the market."

The independent service station operators also dispute the Minister's claims that FuelWatch in Western Australia has seen "about two cents a litre cut in the price of fuel."

But there may be other measures aimed further up the pricing chain.

Mr Bowen says the Government is following up the ACCC's recent petrol pricing report which recommended "we also examine the buy-sell arrangements that operate at the wholesale level, that we examine getting more import capacity, that the oil code should be examined, that terminal gate pricing should be reviewed."

The Federal Government modelled its scheme on the Western Australian FuelWatch program which was introduced eight years ago.

Mr Bowen says "the number of independent retailers in Western Australian has fallen but by no greater proportion than we have seen in other states."

-abc.net.au