Bendigo sits at $1.52 per litre, with more than 25 regional towns currently at a higher price than Bendigo and only four slightly below. 

Prices across Victoria vary from $1.49 to $1.62 per litre for unleaded fuel.

Unleaded fuel in Melbourne sits between $1.44 to $1.50 per litre, with it reaching a six-month high last week at $1.64 per litre.

RACV spokesman Michael Case said the discrepancies were driven by greater competition and fuel cycles in Melbourne. 

"A lot of motorists expect, and quite reasonably, that fuel would be cheaper in Melbourne than in regional towns because of the transport cost from Melbourne to regional centres," he said. 

"Reason suggests that the further away the town is, the greater the cost of petrol, but the fuel cycle confuses all of that."

Mr Case said the reasons Melbourne had a fuel cycle and regional centres related to retail outlets trading off volume and margin. 

"Nobody has the full answer but it has something to do with there being more competition in Melbourne which drives the price down," he said. 

"They reach a low point, with retailers being unable to sustain it. 

"Then one retailer takes the lead and increases the price with everyone else following."

He said the price in regional centres was generally based on actual fuel price differences and global factors. 

But competition remains a factor. 

"There are many less retailers in smaller towns and thus not as much competition, so prices are quite stable," Mr Case said. 

"But you can see the effect of competition when looking at prices between neighboring regional centres. 

"At one point last week the price in Ararat 5 cents less than in Horsham, which doesn't make sense with them being in close proximity. 

"But it shows it's worthwhile to fill up in towns with more competition."

To check fuel prices across the state, go to www.racv.com.au

emma.schenk@fairfaxmedia.com.au