Tony O'Kane | Nov 12, 2009

ACCORDING TO THE Victorian Automobile Chamber of Commerce, lack of competition in the petrol retailing industry may push fuel prices up sharply.

Citing research showing retail pricing for groceries (a sector dominated by Coles and Woolworths) had jumped 41.3 percent since early 2000, the VACC has called on the government to step in and prevent supermarket-backed petrol station chains from muscling out independent retailers.

"The Independent Service Station owners do their best to compete with Coles and Woolworths and their fuel retailer partners, Caltex and Shell," VACC Executive Director David Purchase said.

"But it is an uphill battle and a fight they take on with one hand tied behind their back.

"Independent Service Station owners do not have access to the same wholesale prices as the supermarkets and they do not benefit from the same price discounts along the supply chain.

According to Mr Purchase, the Federal Government needed to do more to protect independent fuel stations from being forced out of business.

"VACC is alarmed that a lack of Government intervention, together with weak competition laws, has paved the way for big supermarkets to dominate," he said.

"If Mobil leaves the retail fuel market, then the supply of fuel will be even further concentrated and competition lessened.”

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With smaller operators out of the way, Mr Purchase said, the bulk of the Australian fuel market would be controlled by a Coles-Woolworths duopoly, which could then dictate bowser pricing.

"Many Independent Service Stations trade at a loss, but they continue to provide a service.

"However, if they were to cease trading, we suspect Coles and Woolworths would seize their chance and tie up the market, making it impossible for any small businesses to return or start up.

"VACC believes it is in the public interest for Independent Service Station operators to be afforded an environment in which they can compete, otherwise consumers will end up paying higher fuel prices in the future," Mr Purchase said.

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