Australia’s monopoly watchdog said today it would oppose BP’s plans to buy a chain of petrol stations from Woolworths.
Woolworths currently operates 531 sites, with a further 12 under construction.
BP supplies fuel to about 1,400 BP-branded service stations throughout Australia.
Rod Sims, chairman of the Australian Competition and Consumer Commission, said: “We consider that BP acquiring Woolworths’ service stations will be likely to substantially lessen competition in the retail supply of fuel.
“Woolworths is a vigorous and effective competitor which has an important influence on fuel prices and price cycles in many markets throughout the country. Many consumers seeking out cheaper petrol will head to Woolworths petrol stations.”
“BP prices are significantly higher on average than Woolworths prices in the major capital cities (see charts below). BP generally increases prices faster than Woolworths during price increase phases, and is slower to discount during the price discounting phase of cycles,” Mr Sims said.
“We believe that fuel prices will likely increase at the Woolworths sites if BP acquires them and other retailers would then face less competitive pressure. The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead.”
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