Petrol market is 'broken' - Megan Woods

Executives from oil giant BP were at Parliament on Thursday trying to explain a leaked email that showed them bumping up prices in one area to stem losses.

Energy Minister Megan Woods said the email was "alarming" - and called BP to her Parliament office for an urgent 'please explain' meeting.

The email showed that BP had boosted prices in Otaki to offset losses in neighbouring suburbs, with up to a 20c per litre difference in some cases.

The Minister called this move "cynical", and asked them to explain how widespread this tactic was.

BP managing director Debi Boffa told media that Otaki had been operating in a heavily discounted market that was unsustainable, and that the company was simply seeking to reduce some of those discounts.

After the meeting, which she described as "robust", the Minister remained unconvinced.

"Those reports pointed to the fact that we could be looking at hundreds of millions of dollars of wealth being transferred from the pockets of ordinary people into the tills of the fuel companies," she said.

"I still remain firmly of the view that we need to push on with the work that we're doing to ensure that people are being treated fairly."

The Minister said this was not an isolated incident, but a widespread problem - adding that the market is "broken".

The practice isn't illegal, but AA said it was an example of how murky petrol pricing really is.

There is legislation currently before Parliament seeking to give the Commerce Commission greater powers to obtain commercial information of petrol companies in order to regulate them.

At the moment the Commission has no such power.