As anticipated, the report found that the city’s higher prices compared to mainland states was driven by higher transport costs, operating costs and retail margins, and that reduced retail sites in Launceston since 2007 may have influenced price competition.

But it found that independent retailer United Petroleum had placed major price pressure on other retailers through a discount agreement with the RACT.

ACCC chairman Rod Sims said the difference between Launceston and mainland cities should only be 3 to 4 cents per litre whereas the report found that the difference was 12 cents for the last six months of 2015.

He said the situation changed when United Petroleum established a partnership with RACT to offer an 8 cents per litre discount over two months from February at 40 statewide sites, forcing Coles Express and Woolworths to increase their discount offers.

“The deal has saved Launceston people a lot of money … and it gave United comfort that they would get volume out of it,” Mr Sims said.

The report found that the increased discount offers led to a decrease of 2 cents per litre on average across the state between February and April while retail prices in the five largest cities increased by 6.1 cents.

It found that the difference between retail prices and published wholesale prices decreased in Launceston over the discount period by 6.8 cents a litre while the gap grew on the mainland by 1.4 cents.

The difference, referred to as gross indicative retail differences (GIRD), was 10 cents per litre in Launceston between 2007-08 and 2011-12, and 16 cents per litre between 2012-13 and 2014-15.

The report noted that petrol prices between January 2015 and April 2016 were on average 0.6 cents per litre higher than smaller state locations and that Launceston’s GIRD was the state’s second highest between 2007 and 2015.