Mobil buyout 'won't affect' wholesale prices for now

Caltex's plan to purchase 302 Mobil service stations will not affect wholesale diesel prices for the time being, FUELtrac claims

By Michael House

Caltex’s plan to purchase 302 Mobil service stations will not affect wholesale diesel prices for the time being due to the continued presence of other oil companies in market, FUELtrac says.

"It [the purchase] won’t affect the wholesale price [of diesel] because Mobil is claiming in the short term they will stay in the wholesale market," FUELtrac General Manager Jeff Trotter Trotter tells ATN.

"Plus there are other large independents [in the wholesale market] plus other companies like BP and Shell."

However, Trotter claims the retail side is likely to become almost completely controlled by Caltex should the Australian Competition and Consumer Commission approve the purchase because of Caltex’s relationship with retail giant Woolworths.

Although Caltex and Woolworths have denied the purchase will increase their share of the fuel retail market, Trotter claims it "is just a strategy we think, to get the deal through the ACCC".

"Once it gets approval, we think over the next two years they [Caltex] will convert most of the outlets to Woolworths outlets," he says.

"Strategically, Caltex may have purchased all these outlets in a block to stop them being sold to independents."

However, Caltex says it is actually looking to battle Woolworths in the retail market.

"We compete with Woolworths at a retail level and we want to acquire these sites to strengthen our position in the retail market," Caltex spokeswoman Georgie Wells says.

"Caltex has no intention to pass these service stations on to Woolworths – in fact the acquisition, if approved by the ACCC, will allow Caltex to better compete with Woolworths and other fuel companies," says Georgie Wells.

Wells says the Mobil fuel rewards card will no longer be valid at the service stations and customers will need to join Caltex’s Star Card system in order to be eligible for fuel discounts at the sites in future.

The Australasian Convenience And Petroleum Marketers Association (ACAPMA) General Manager Nic Moulis, says this would be catastrophic for independently owned Mobil service stations.

"‘In some instances, fuel cards contribute up to 40% of total fuel sales volumes for independent operators', says Moulis.

"They are very important to Mobil distributors and retailers [and] the proposed shut down of the Mobil Card network will have dire consequences for these independent Mobil-branded operators."

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