The head of the competition watchdog says he has strong concerns about heavy petrol discounts being offered by Australia's two major supermarkets.

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims has been speaking at an Australian Institute of Company Directors lunch in Melbourne.

He is concerned that petrol discounts from Coles and Woolworths are reaching 45 cents a litre in some instances.

He says that is likely to harm other retailers and is therefore harmful to competition.

"I think if people want to offer discounts, they should offer them in their own field of endeavour," he said.

"What we're about is protecting competitive processes.

"If these shopper dockets continue at these levels, it's going to be very hard for other players to compete and we may end up with just two companies in the country selling petrol."

The ACCC has been investigating shopper dockets since mid-2012.

Mr Sims says that investigation will be complete in the next few months.

Service Station Association senior manager Colin Long says if left unchecked, the petrol price docket war will send some independent petrol providers to the wall.

"The sort of discounts they're giving on the shopper dockets are just ridiculous," he said.

"It's being cross-subsidised absolutely from their grocery businesses, because they have the ability - being the all-powerful Coles and Woolworths - to just tickle up the prices on all their thousands of products in their supermarkets and give it back in their other division which is their petrol division."

Australian Automobile Association executive director Andrew McKellar also praised the ACCC for raising the issue.

"There's been long-standing concern about the impact of supermarket shopper dockets on the market," he said.

"We are concerned that it is undermining competition in the market and in the longer term, the risk is that that means higher prices for consumers."

Mr Long says that has already happened in Darwin where there are few independent fuel retailers.

"They do not enjoy a price cycle ... so they charge full retail price up there every week, week in, week out," he said.

"So we want the ACCC to have a really good hard look at this."

Mr Sims went to pains to hose down expectations of swift action.

"We don't have power to ban activity. I don't think we should either. What we do is investigate whether or not we think there's a breach of the act," he said.

"We have an active investigation underway, it's been going on for some time; we're gathering evidence to see whether or not we believe the shopper dockets do amount to a breach of the act."

Mr McKellar says it should be an election issue.

"It should be over to the major parties to ensure that the ACCC has the powers that it needs to do more than just monitor and report on the petrol price," he said.

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