Energy Minister Judith Collins has launched a probe into petrol pricing after concerns fuel margins more than doubled over the past five years.
Collins has announced that the Ministry of Business, Innovation and Employment (MBie) would look into how fair petrol and diesel prices were at the pump.
She said it would report back by the end of June. The advantage of a market study was that it could be done quickly - but it would require the industry to cooperate.
"I have spoken to the oil companies this week and I am very confident that they will work with MBie and provide the required information in a timely manner. It is in the best interests of everyone, including oil companies, to make sure New Zealand has quality, reliable and reasonably priced fuel."
It follows concerns about the disparity in fuel prices from region to region, leading to concerns petrol companies were using regions where there was less competition to effectively subsidise losses in other regions where there was competition.
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Last month the Automobile Association called for fuel companies to explain why the national price of fuel rose 5 cents per litre last month, despite no increase in commodity prices or a drop in the exchange rate.
Collins, who became Energy Minister at the end of last year, said she was "disappointed" fuel margins were going up.
"Ensuring a competitive market is the best way to keep fuel costs down."