The ACT government will commission a Legislative Assembly inquiry into why drivers are consistently charged more for fuel in Canberra.
Revealing moves to establish a select committee, Chief Minister Andrew Barr slammed the Australian Competition and Consumer Commission for refusing his requests to investigate what he called "unjustified" discrepancies between fuel prices in Canberra and other parts of the country.
The average price of unleaded petrol has been higher than the price in each of Australia's five major cities in each of the past 60 days, according to data on price comparison website MotorMouth.
Mr Barr said it was clear the market had failed to deliver competitive fuel pricing for Canberrans, with "no credible reasons" put forward to explain why prices were higher in the ACT than other cities and even in surrounding areas of NSW.
"The government has written to the ACCC and I have personally met with the chairman to implore him to use that body's investigative powers to undertake a deep-dive analysis on why the market is failing in the ACT," Mr Barr said.
"Despite these unexplained and unjustified price differences, the ACCC has refused this request."
The select committee, which will be publicly announced on Monday, is set to be tasked with examining how fuel prices are determined in the ACT and the impact of rising fuel prices on Canberra drivers.
It will also look into regulatory and legislative solutions that could impact on fuel prices.
Representatives of fuel providers may be asked to give evidence during public hearings of the select committee, which will table its final report in June.
Consumer Affairs Minister Shane Rattenbury said Canberra drivers were "being gouged at the pump".
"A select committee will be looking closely at what's possible to bring down prices for consumers," Mr Rattenbury said.
"In the meantime we encourage the community to vote with their feet – or car – before deciding which petrol stations to attend."
Mr Rattenbury encouraged drivers to use free price-comparison websites and consider filling up in areas like the airport precinct and Fyshwick, which generally had more competitive prices, and to consider using public transport.
The government's announcement of a select committee comes after the Sunday Canberra Times published a series of five articles on the disparity in petrol prices between Canberra and other parts of Australia.
Following those articles, the Canberra Liberals announced that, if elected, they would trial a scheme modelled on Western Australia's FuelWatch, which requires service stations to freeze prices for 24 hours.
The Sunday Canberra Times also sought comment from Mr Rattenbury and Fair Trading Commissioner David Snowden about whether the ACT government had looked into using powers that would allow Mr Rattenbury to set fuel prices under the 1993 Fair Trading (Fuel Prices) Act.
The legislation says the ACT Fair Trading Commissioner may make a recommendation to the minister about a particular fuel.
On the commissioner's recommendation, the minister has the power to determine a maximum base wholesale price, maximum retail price and the maximum retail margin for the specified fuel.
An ACT government spokeswoman said the government was "seeking advice" on the operation of that legislation.
In another move designed to protect Canberra drivers at the pump, the ACT government will this month ban service stations from displaying discounted prices on fuel boards.
"Consumers should not be lured into petrol stations by cheap prices which are conditional on having a docket or in-store purchase and have the right to know exactly how much they are going to pay at the pump," Mr Rattenbury said.
"This is about creating greater transparency in the fuel market, and making it fairer for all motorists who are trying to find the best deal."