Petrol is not as cheap as it should be, and the government's consumer watchdog is worried that customers are being gouged.

In a tersely-worded update on petrol prices across the country, the chairman of the Australian Competition and Consumer Commission, Rod Sims, noted significant increases in the past six months in the margin between what retailers pay for petrol and what they charge at the pump. The price paid by motorists was, on average, 11.8 cents per litre more than the wholesale price of petrol - the largest such margin recorded by the ACCC since it began keeping records in 2002.

Mr Sims said the regulator would be "closely monitoring" such margins in the months to come "because high retail margins likely indicate increased profits of the petrol companies at the expense of motorists".

Bowser prices in Australia's five largest cities fell 2.6 cents per litre in the three months to the end of September, but the fall masks an increase in the money that flows through to petrol companies' profits.