Coles and Woolworths have come to a voluntarily agreement with the Australian Competition and Consumer Commission (ACCC) to cap their fuel discounts to 4 cents per litre.

The ACCC has spent months investigating into whether the fuel saving offers issued by the major supermarket chains were resulting in the lessening of competition in the fuel market.

ACCC chairman Rod Sims said the voluntary cooperation by Coles and Woolworths has saved the watchdog from deciding whether to address the matter further in court.

“The ACCC’s investigation was nearing completion and although we had yet to make a decision in the matter, our investigation had caused us to consider the competition effects arising from the fuel saving offers,” he said.

“We had focussed on the offers by the major supermarket chains of fuel discounts of 8 cents per litre, which were made for sustained periods during 2012 and 2013, and we were concerned that those offers could have longer-term effects on the structure of the retail fuel markets and also short term effects of increasing general pump prices in those markets.

“We’ve accepted the undertakings because they address the ACCC’s principal competition concerns and allow the matter to be resolved quickly and efficiently.”

The new cap agreement will come into effect from 1 January 2014, which has been welcomed by the Australasian Convenience and Petroleum Marketers Association (ACAPMA) CEO Nic Moulis who believes it will ease the pressure off independent businesses.

“While the 4 cents a litre shopper docket discount looks here to stay, this agreement will put a stop to the deep and sustained price promotions that include discounts of 10, 20 and up to 45 cents a litre,” he said.

“It was these massive discounts that the regulator was obviously – and rightly – concerned about.”

The ACCC, however, remains concerned about any other fuel discount offers funded by non-fuel retailing operations and any other fuel discount offers above 4 cents per litre, which are conditional on purchases of goods or services. It will assess the lawfulness of any such offers made by other parties and take appropriate action to deal with any traders it considers are engaging in anti-competitive conduct.