The nation's petrol watchdog says he will review the benchmark used to set Australian prices.
Any change to the use of the Singapore MOPS95 petrol price as the indicator for Australia would be a massive change to the way prices are set.
The price is used by oil companies here as justification for changing unleaded petrol prices at the pump. Refiners add their costs to the Singapore price to come up with a wholesale price, before retailers add their final margin.
However, as an Australian Competition and Consumer Commission inquiry discovered, they also add a "quality premium" of up to three cents a litre, despite claiming MOPS95 closely resembled the standard of petrol sold in Australia.
About 20 per cent of petrol used in Australia is imported, mostly from Singapore.
The issue has resurfaced after the benchmark price rose in recent days despite there being no obvious reason for it to do so. It rose five cents in the week to January 16, as crude oil prices continue to plummet.
Petrol Commissioner Joe Dimasi told WAtoday.com.au that the Australian Competition and Consumer Commission was reviewing whether MOPS95 was the most suitable starting point for prices in Australia.
"What is the basis for that price, how is it being set, we just want to confirm to ourselves that it's a good basis. The community needs to have confidence it's the right price."
"I'm keeping an open mind, but I want to make sure no games are being played."
The review - which had gone out to tender - would be carried out by independent "technical experts".
University of NSW associate professor Frank Zumbo, a competition expert, said the Singapore benchmark was open to manipulation by speculators and others which artificially inflated it.
"There are fewer trades in (it) and as a result there is less pricing data," he said.
Oil companies claimed it was a proper benchmark as it reflected the quality of petrol sold in Australia. However, they then charged the quality premium on top of other costs, a tactic which meant they were "double dipping", Mr Zumbo said.
That in turn inflated prices at the pump, by two or three cents a litre.
An alternative benchmark that will be considered in the review, MOPS92, was traded more, giving a more transparent market and less room for manipulation.
"In any event, the whole basis of Australian oil companies charging a quality premium needs to be questioned," Mr Zumbo said.
"Tightening quality standards around the Asian region as well as increasingly efficient Asian refineries driving down the refining costs mean that better quality petrol is now cheaper to produce."
Mr Dimasi said he hoped to have completed the review by the middle of the year.
