Petrol retailers are expecting to lose $60 million this year, and consumers could bear the brunt because petrol stations are likely to increase prices to recoup the losses.

Since September last year, service stations wanting to report a petrol theft have been required to send a form to the police by fax machine.

The Bureau of Crime Statistics and Research says this new procedure is making its latest data unreliable and inaccurate.

The monthly number of incidents averaged at 1020 in the year before the launch. It now averages 730 because of "reduced reporting", said deputy director Jackie Fitzgerald.

"The sharp fall shows the new method ... is a deterrent to reporting the offence," she said. "Into the future we won't know the true prevalence of the offence."

The Australasian Association of Convenience Stores' latest report shows each petrol station is losing an average of $191 in petrol every week, for a nationwide annual loss of about $60 million – up 30 per cent on the previous year.

NSW Police did not respond to questions about whether the fax-a-form method had rendered petrol theft data useless.

Instead, it pinned the steep decline on the system's ability to separate criminal and civil petrol drive-offs, which "not surprisingly, [would lead] to a reduction in the number of matters being reported to police".

Failing to pay for petrol is not a criminal offence when the motorist attempts to pay for it, only to find they have forgotten their wallet or have no means to pay for it, police say.

"In this instance, the customer makes an undertaking to the service station that they will return to pay for the fuel and leaves personal particulars. In this type of case, the onus is on the service station to track down the payment."

Jeff Rogut, chief executive of the convenience stores association that represents 5000 stations, said police inaction, weak laws and high fuel prices were going to increase theft rates.

He said retailers such as members 7-Eleven, Caltex Star Mart and BP were forced to slug higher petrol prices on motorists to recoup the losses. "The cost can't be absorbed by the retailers and will be passed down to motorists."

The industry is lobbying the state government to recognise petrol theft as a crime, as it currently treats it as a "breach of contract". It also wants offenders to be hit with on-the-spot fines, stripped of demerit points, and for repeat offenders to have their vehicles confiscated.

In response, NSW Police says thefts could be curbed with prepaid bowsers – an unpopular proposal among retailers because of the potential hit to profits from store purchases.

"A lot of the profit comes from walk-ins, where people purchase additional items on top of their fuel spend, so they really need people to come into their store," said Colin Long, senior manager of the Service Station Association, which represents 600 mostly independent outlets in NSW.

The police said the fax-reliant system was launched after extensive consultation and trialling with petrol businesses.

But Mr Long said he had no idea why the police introduced a "bureaucratic, slow and cumbersome" system. He wants the old system of retailers directly calling the local police at the time of offence to return.

"We are talking to the police to try and change it. It's not as professional as the previous system was," he said. "I don't know why they did it. Maybe they're trying to cut back on admin costs."