Energy giant BP PLC’s plan to buy a network of Australian petrol stations from supermarket chain Woolworths Ltd was yesterday blocked by the competition watchdog over fears that it would lead to higher fuel prices.
The British firm announced a year ago that it had agreed to pay US$1.3 billion to buy, rebrand and operate Woolworths’ existing 531 fuel and convenience stores, plus 12 sites under construction.
However, the Australian Competition and Consumer Commission (ACCC) said it opposed the move.
“We consider that BP acquiring Woolworths’ service stations will be likely to substantially lessen competition in the retail supply of fuel,” ACCC chairman Rod Sims said.
BP’s prices were significantly higher on average than Woolworths in Australia’s major cities, and during cost cycles, it also hiked the cost of gasoline faster and discounted it more slowly, he 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,” Sims said. “The bottom line is that we consider motorists will end up paying more, regardless of where they buy fuel, if this acquisition goes ahead.”
BP already supplies fuel to approximately 1,400 of its own branded service stations throughout Australia, setting fuel prices at roughly 350 of them.
The company said it was disappointed with the decision.
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