I don't know much about microeconomics, so I'll have to take Vaz Lube's word that government regulation of the petrol price is a bad thing. It probably even leads to higher overall prices because of decreased competition, I don't know.
And, frankly, I don't care. I like the convenience of being able to fill up anywhere, and knowing that I'm paying the same price as everyone else in the area. I like the idea of going into a garage - any garage- and saying, "full tank-unleaded" without worrying about the price. I don't need the hassle of looking for lower-priced petrol, and calculating whether the cost of driving across town to fill a half-tank of petrol will be offset by a 20 cent/litre saving. Life is complicated enough already without worrying about being gouged by petrol station owners. I don't care if average prices come down, I only care about knowing, with 100% certainty, that I am not paying more than the average price.
It's probably stupid, and economic blasphemy for me to say so, but in this case, I feel better off having the government set petrol prices using a convoluted formula, than leaving things to the whims of the market.