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Sydney Morning Herald: Shell eyes Sydney terminal site

Sydney Morning Herald: Shell eyes Sydney terminal site: “potentially forcing thousands of independent service stations to close”

July 19, 2004 – 10:04PM

Petrol giant Shell is in the running to take over a critical Sydney storage facility from fuel importer Trafigura Australia, potentially forcing thousands of independent service stations to close.

Trafigura, an independent petrol wholesaler, may be forced out of its Port Botany terminal in about six weeks, with site owner Vopek refusing to renew the lease.

“We’ve been trying to try to talk to Vopek, who own the terminal, about an extension to their contract or a new contract from September this year, without success,” Trafigura managing director Barrie Jacobsen told ABC TV.

The ABC reported that Shell had confirmed that its “negotiations for the space were at an advanced stage.”

Shell reportedly wants part of the terminal space for jet fuel, while the additional capacity would potentially be used for its increased market share from the success of its shop-a-docket fuel scheme with Coles supermarkets.

The Service Station Association (SSA) warned that Trafigura’s possible demise could spell disaster for independent petrol retailers.

Such retailers already are suffering from the success of shop-a-docket schemes, where customers get fuel discounts for shopping with a specific grocery chain.

“The terminal at Sydney, and Trafigura’s access to it, is vital to ensure that independents remain viable in this state,” SSA chief executive Ron Bowden told ABC TV.

Mr Bowden said if Trafigura was forced from the market then independent petrol stations in NSW would have their options for buying fuel severely curtailed.

“They could only go to an oil company … (which would) then realise that they had no effective, alternative competition and they could charge whatever they like,” he said.

“We believe that over the next three to four years, 3,000 service stations in Australia will go to the wall.”

But Shell Australia spokesman Ian McKenzie disputed it would have such a big impact, as Trafigura had principally supplied Woolworths petrol stations.

“The major suppliers to independent retailers are the local refiners, Shell and Caltex. That’s always been the case and I’d expect it to continue to be the case,” he told ABC TV.

“Therefore, I wouldn’t see much impact on pump prices at all.”

Australia’s competition watchdog is investigating the Trafigura case.

As for the shop-a-docket schemes, Australian Competition and Consumer Commission chairman Graeme Samuel disputes they are anti-competitive.

“The shop-a-docket schemes are constantly under review … because as the law currently stands, those shop-a-docket schemes have been authorised by the commission, but that authorisation can be removed,” he told ABC TV.

“At this point, we are not satisfied that there is a potential anti-competitive structure developing within the industry.”

© 2004 AAP

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