Mike Stevens | Sep 14, 2010

Strong competition among Australia's top fuel retailers is pushing fuel prices down and, according to industry experts this week, regular unleaded could fall to $1 per litre in the next two weeks.

In Queensland, motoring organisation RACQ is expecting the coming school holidays to drive fuel prices below $1.10 per litre and that some retailers may go even further.

"We are seeing low prices across the country at the moment with the major retailers, Coles and Woolworths, seemingly fighting for market share and, somewhat surprisingly, leading the retail prices down," RACQ spokesperson Paul Turner told News Ltd this week.

Mr Turner said that while the price war between the big retailers is making business difficult for independents, the low prices are good news for motorists - at least in the short term.

CommSec economist Savanth Sebastian said that while prices were currently at their lowest in 11 months, the average fuel price at the bowser has yet to reflect the rising Australian dollar, meaning that prices could continue to fall.

Echoing Mr Turner's comments, Mr Sebastian said that while the current low prices are a "short-term gain" for motorists, the cost of fuel is likely to rise again before too long, and quickly.

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