NRMA ACT director Alan Evans said the difference between the average regular unleaded price in Sydney and Canberra at close of business on Monday was "a preposterous 19c per litre".

"The supermarkets and their associated oil companies should be Santa Claus and not Scrooge to Canberra motorists," he said.

"A large supermarket chain has capped prices in the Sydney metropolitan area at $1.14 or less until 4 January next year while independent retailers are offering regular unleaded in Sydney as low as $1.12 per litre.

"We would [love] to see the petrol companies extend this Christmas gift to the Canberra market."

Mr Evans said Canberra needed more competition and the average price of petrol should fall to less than $1.20 a litre.

"If more than half of Sydney's petrol stations are selling at under $1.18 per litre and making a profit, there is no reason why prices shouldn't be similar in Canberra," he said.

Mr Evan's Christmas wish comes as the national average price of petrol fell by 4c last week to 128.4c a litre, the biggest price drop in six years.

According to the Australian Institute of Petroleum, the average price of petrol in Canberra fell 2.4c to 144.3 cents a litre last week, which was still 23c more expensive than petrol in Sydney.

NRMA spokesman Peter Khoury has said it is likely national petrol prices might continue to decline to about $1 a litre in coming months.

"If we don't get to a dollar, we will get very close to it," he said.

The last time the average national price of petrol was below a dollar was in February 2005; a time when Ricky Ponting had just captained his first home test series and Schapelle Corby was yet to be convicted.

Commsec economist Craig James said Australian households were now saving $32 a month on petrol compared to a year ago, which had boosted their spending power at a key time of the year.

A petrol price war was ignited earlier this month when Canberra's Costco petrol station opened in Majura Park with discounted prices.

Its nearest competitor, Woolworths Caltex, matched the unleaded petrol price of 129.7c a litre - a roughly 14c or 10 per cent discount on previous prices - within three hours of Costco opening.

Mr Khoury said the average petrol price in Sydney on Friday was 1.16 per litre, only 4 cents higher than the average gate price of $1.12, driven by strong retail competition.

"With Coles and Woollies setting their price at $1.14, I can't see the independents putting their prices up any time soon," Mr Khoury said, adding that most of the independents had been below $1.14 for "at least a week anyway".

"I think like the rest of the country, the NRMA would be over the moon about sub-one-dollar petrol," he said.

with Luke Malpass