Motorists could be saving up to 30 cents per litre at the fuel pump within one year.

The Government announced today it will pass a Fuel Market Bill before the election to allow more competition in the fuel industry.

It follows a Commerce Commission report which found New Zealanders were paying too much for petrol.

Minister for Energy Megan Woods says the Government is "swiftly" taking action to ensure there's a fair and competitive market that works in the interest of consumers.

Six sweeping changes will be drafted into the Bill, which will clear the way for smaller fuel companies to expand in the market.

"What we can point to is examples that we've seen… There's examples where we've seen even 30 cents a litre difference when a competitor moves into a market," Woods says.

The announcement on Thursday was made in Christchurch for good reason.

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"We know that the South Island has been paying up to and over 30 cents a litre more than North Island counterparts because there simply hasn't been as much competition here," Woods says.

Not unexpectedly, motorists are welcoming the move.

"We've got four kids and we spend $200 a week on fuel, so anything cheaper would be better," one person says.

"It would be good to have cheap petrol and more service stations with cheap petrol," another says.

The National Party says the price could drop even further if the Government got rid of fuel tax.

The fuel sector has 30 days to respond to the proposed law changes, that Woods promised will be passed by the middle of this year.