The Road Transport Forum says BP's price spreading tactics illustrate the folly of a regional fuel tax for Auckland.

An internal email from BP revealed today the company instructed its lower North Island outlets to raise petrol prices to counteract a customer falloff in Otaki.

Forum chief executive Ken Shirley told Larry Williams they've known for a long time what fuel companies do to reduce price gaps and spread their pricing around the country.

"That's exactly what the regional fuel tax will create, clearly its to be recovered by the oil companies. All they will do is spread it over the country, the whole thing is a political shame."

LISTEN TO THE FULL INTERVIEW WITH LARRY WILLIAMS ABOVE