The cost of a stamp will rise from 60c to 70c on March 31, under the proposal being put to the Australian Competition and Consumer Commission on Friday.

Pensioners and concession card holders would be eligible for discounted 60c stamps, until at least 2017.

Australia Post chief executive Ahmed Fahour said the price rise was less than the increase of inflation.

He said falling letter volumes had meant Australia Post made a loss of $218 million in its regulated mail business in the 2012/13 financial year.

“This 10 cent increase will allow us to partially offset the growing losses that we are seeing in our letters business," he said.

"The current stamp price no longer reflects the true cost of delivering each letter and stamp price increases have not kept up with inflation.

"At 70 cents the Australian domestic stamp will remain among one of the lowest prices in the OECD.”

The basic price of a stamp has only increased three times in the past 22 years, from 45c to 60c. The last increase from 55c was in June 2010.

Over the past five years the volume of domestic letters posted in Australia has declined by around 1 billion items – from 4.6 billion in the 2007/08 financial year to 3.6 billion in 2012/13.

Mr Fahour said as more people communicate online the number of letters were expected to continue to decline at "a rapid rate".

Any customers eligible for concession prices would be required to register for an Australia Post concession card. Details on that registration process will follow completion of the ACCC notification process.