Deal could raise petrol prices

Motorists could end up paying more for fuel if BP’s proposed $1.8 billion takeover of Woolworths petrol stations goes ahead, the competition watchdog warns.

MOTORISTS could end up paying more for fuel if BP’s proposed $1.8 billion takeover of Woolworths petrol stations goes ahead, the competition watchdog warns.

Australian Competition and Consumer Commission Chairman Rod Sims said the deal could substantially reduce competition in metropolitan areas by reducing the number of rivals in the fuel market, and lessening pressure on other retailers to keep their prices low.

“As a result, motorists may end up paying more at the pump,” Mr Sims said. Woolworths in December said it had agreed to sell its 527 petrol stations and 16 development sites to BP, which already owns 350 retail sites in Australia and supplies a further 1050 BPbranded sites.

Mr Sims said the exit of Woolworths from fuel retailing would remove its influence on metropolitan fuel prices, and he was concerned BP would not follow the supermarket giant’s pricing strategy.

BP Australia president Andy Holmes said the company was confident it could work with the ACCC to address the issues raised.

“We believe that Australian retail fuel and convenience markets are highly competitive and will remain so following the completion of the transaction,” Mr Holmes said in a statement.