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Melbourne Herald Sun: Fuel outlets feel pressure

Melbourne Herald Sun: Fuel outlets feel pressure: “forcing hundreds of service stations out of business and putting pressure on unaligned BP and Mobil.”

14 July 04

THE Motor Trades Association said yesterday the fuel link-ups between refineries and Australia’s two biggest grocers is forcing hundreds of service stations out of business and putting pressure on unaligned BP and Mobil.

MTA director Michael Delaney said he believed the Coles Myer-Shell and Woolworths-Caltex alliances will not be good for consumers in the long term if the industry becomes a duopoly.

Both joint ventures offer 4 a litre off the price of petrol if the customer has purchased goods worth $30 or more at the respective supermarkets.

“It has come at a very significant cost to competition in the market over the longer term in that the independent sector simply can’t compete with this offering,” Mr Delaney said.

“They can’t even buy at the posted price of (Shell and Caltex) let alone at the price minus another 4.

“These dealings between the grocers and the oil companies have the prospect of seeing the demise of the other two big refining oil companies and many many other retail outlets in the community.”

Last week the competition watchdog gave the go-ahead for the new long-term deal between Woolworths and Caltex while Coles and Shell celebrate their first 12 months together this month.

Mr Delaney represents 7000 service stations and said that over the past three years 3000 operators have left the industry.

“We’ve lost hundreds in the past 12 months — and more are closing as we speak,” he said.

He believed the Australian Competition and Consumers Commission had failed to address the future with its approval of the fuel schemes.

Consumers have embraced the petrol voucher scheme with Coles Myer on course to sell $4 billion of fuel in its first year. – AAP

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