Snaps up Woolworths

Control of the country’s multi-billion dollar petrol market is set to be turned upside down with UK oil major BP plunging $1.8 billion to buy the Woolworths nationwide chain of petrol stations which will catapult it to the position of market leader, and triggering immediate concerns over the level of competition within the industry.

Embattled retailer Woolworths has been in talks to sell its petrol stations for several months, with Caltex the underbidder. Caltex already supplies the Woolworths network of petrol stations, and it will see its share of the market shrink with the sale.

At present, Woolworths and Coles each hold an estimated 24 per cent of the national market, with Caltex holding 18 per cent in its own name, ahead of BP’s 15 per cent. The purchase of the Woolworths outlets will give BP a dominant 39 per cent share of the national market, sparking concerns that its share of the market could dampen competition.

As a result, the competition watchdog the ACCC, said it is to review the deal, with motorist organisations pushing to ensure any deal does not lessen industry wide competition.

BP’s purchase comes in the wake of the exit of Shell Oil from petrol retailing. It sold its Victorian refinery and 870 branded petrol stations to international oil trader Vitol in 2014, while another global trader, Trafigura, with an African partner of the Gull, CCG, Matilda and Neumann Petroleum outlets in recent years, giving it a spread of 270 outlets under the Puma Energy brand.

“The ACCC has been formally advised of the proposed transaction,” the competition watchdog said in a statement. “We will commence a public review once we receive a submission from the parties.”