BP walks away from Woolworths acquisition

The RACT has welcomed BP’s decision to walk away from its proposed acquisition of Woolworths Limited’s retail service station sites.

Stacey Pennicott, RACT Executive General Manager, Membership & Community, said the BP decision would ensure that there was no further reduction of competition in Tasmania, which was a major concern raised by the RACT in its submission to the Australian Competition and Consumer Commission’s (ACCC) review of the proposal.

Tasmania experiences higher than average fuel prices compared to the rest of Australia due to a current lack of competition in the market,” Ms Pennicott said.

“The ACCC enquiry into Launceston fuel prices highlighted this issue specifically and concluded that the state required more fuel providers in order to stimulate competition and ultimately provide for a lower fuel price for motorists.”

Ms Pennicott said there were a number of locations in Tasmania that were only serviced by a Woolworths and BP fuel retailer. 

“These areas would be heavily impacted by the reduced competition if the proposed merger occurred,” Ms Pennicott said.

Ms Pennicott said the RACT’s submission to the ACCC against reduction of competition in Tasmania was just one of the measures the organisation had undertaken to encourage lower fuel prices in the state.

“The introduction of new fuel price boards legislation in May – where sites can only display the undiscounted price – is something we had lobbied for since 2014, and already we’re seeing high levels of compliance from fuel sites, which is great,” she said.

“We also entered a partnership with United Petroleum two years ago, where our members can save 6 cents per litre off fuel, just by showing their RACT card when they fill up and pay. Since the start of this partnership our members have saved almost $7.75 million. In addition, a number of new United sites have opened around the state, increasing competition in regional areas.

“For example in Kingston, if the BP acquisition of Woolworths had gone ahead, there would have only been one retailer in this growing area. Instead, with the opening of a United site earlier this year, there are now three sites to choose from.

“Another partnership we have formed to assist motorists shop around and compare the best fuel prices in their area is the GasBuddy app, which we encourage people to update daily.

“We will continue to fight for Tasmanian motorists for lower fuel prices and increased options.”