Fuel fight fires up over south

A million motorists could be saving money at the pump if petrol giants allowed Gull NZ access to terminals, Gull New Zealand boss Dave Bodger says.

A lack of competition was keeping petrol prices high in Wellington and the South Island because it could not afford to build a fuel terminal, including large holding tanks, in the South Island and the big petrol companies would not supply it with fuel.

A Government report on Wednesday found gross profit margins on fuel at the pump had doubled to about 30 cents a litre in Wellington and the South Island over the past four years.

Gull operates in most of the North Island but had not ventured south of Levin, constrained geographically by its only terminal in Mt Maunganui.

Gull had tried to buy petrol from its big competitors in the South Island, but was given the ‘‘vertical finger’’, Bodger said.

Bodger said one way to deal with the lack of competition would be for the Government to step in and allow independent players like Gull access to the terminals in the South Island.

Z Energy spokesman Jonathan Hill said Bodger’s stance ‘‘was not fair, or right’’.

Gull unsuccessfully bid for South Island service stations that Z was required to divest as part of its takeover of Caltex New Zealand.

‘‘As a condition of bidding they had to confirm that they had access to fuel supply in the South Island,’’ Hill said.

‘‘We challenge Gull to invest in New Zealand rather than looking for [the] Government to give it a free ride.’’

Mobil New Zealand manager Andrew Mcnaught also said there was no barrier to Gull investing in its own terminal in the South Island. BP declined to comment.

Caltex Australia bought Gull for $340 million last year.

"We challenge Gull to invest in New Zealand rather than looking for [the] Government to give it a free ride." Z Energy spokesman Jonathan Hill

Petrol terminals could cost up to $100 million to build, but Bodger said it was never a question of money, but of motorists.

‘‘What you’ve got is a population of 1 million [in the South Island] against a population of 3.5 million [in the North Island].’’

Other small operators such as Allied, Waitomo, and Mckeown operated in a similar way to Gull with small stations with above ground tanks.

But they bought their fuel from Mobile or Z, rather than importing their own.

Oil market expert Ian Twomey said that made Gull one of a kind.

‘‘In the areas where [Gull] are most prominent, which is most of the North Island, they’ve stopped the [profit] margin going up,’’ he said, ‘‘whereas the margin has climbed in Wellington and the South Island.’’

Automobile Association senior policy analyst Mark Stockdale said wherever Gull opened, lower prices followed – what the AA termed the ‘‘Gull effect’’.

‘‘Caltex Australia is a big company with big resources and it would be nice to think that by buying Gull they would have plans to grow and would be able to afford to invest in developing a distribution network in the South Island,’’ he said.

But Stockdale said demand for petrol was not growing, which could stop Gull expanding.

As a new entrant to the South Island, Gull would have to pull customers from existing retailers.

Bodger said Gull had looked at options to open a service station in Wellington, ‘‘but there’s no timeline at this stage’’.