In December 2016, BP signed deal to acquire Woolworths’ existing 527 fuel and convenience sites across Australia, as well as an additional 16 sites which are under construction, for $1.3bn.
The deal, however, is expected to be opposed by the Australia’s antitrust regulator as it considers the proposal to substantially reduce competition in the retail supply of fuel.
ACCC Chairman Rod Sims said that the fuel prices would increase at the Woolworths sites if BP completes the acquisition and other retailers would then face less competitive pressure.
“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 earlier said that the acquisition of Woolworths’ fuel and convenience sites will add to its existing network of 350 company-owned retail sites across Australia.
Sims added: “This acquisition will likely affect metropolitan price cycles by making the price jumps quicker, larger and more coordinated. Reduced competition will also mean that prices will not fall as far, or as quickly, in the discounting phase of the cycle.”
The regulator said that it has taken into account a large number of submissions from a broad range of market participants including motoring groups, competitors, and both corporate and individual consumers.
Commenting on the ACCC decision, BP Australia president Andy Holmes said: “We remain confident that, with appropriate divestments as offered by BP, this transaction would not substantially lessen competition.”
Holmes noted that the firm is currently consulting with its lawyers to determine next steps.
Currently, the company supplies fuel to nearly 1,400 BP-branded service stations throughout Australia.
