The Consumer Affairs Minister is standing by his prediction fuel prices could drop by 18 cents.

It comes after a Commerce Commission Report recommending changes to reduce profit margins.

The regulator says companies have been making persistently higher profits over the past decade than would be expected in a competitive market.

It says the core problem is a lack of competition in the wholesale market, which means higher wholesale prices, meaning consumers pay more at the pump.

Kris Faafoi told Heather du Plessis-Allan competition is the key to reducing prices. 

"When Waitomo came to Upper Hutt in May this year, they dropped their prices by 32 cents a litre. Interestingly enough, 24 hours later, the other companies dropped their prices."