ACCC Blocks Caltex Mobil Deal, Federal Government Requests Price-Fixing Investigation Photo:
Mike Stevens | Dec, 03 2009 | 0 Comments

THE AUSTRALIAN Competition and Consumer Commission (ACCC) has this week blocked a bid by Caltex to purchase 300 Mobil service stations in Australia.

Basing its decision on the likely effect the proposed acquisition would have had on local market competition, the ACCC also cited the potential for price-fixing among the larger retailers.

"The ACCC concluded that the acquisition by Caltex of Mobil's 300 service stations would be likely to substantially lessen competition across a range of retail fuel markets," ACCC Chairman Graeme Samuel said today.

"The acquisition of these sites by Caltex would be likely to lead to reduced retail competition resulting in higher fuel prices for consumers."

The deal would have given Caltex a 22 percent share of Australia?s branded fuel market (up from 16 percent).

If approved, the purchase would have seen Caltex displace Shell as the biggest supplier in Victoria, and increase its majority hold in Queensland, New South Wales and South Australia.

"As one of the leaders of the weekly price cycle in these cities, this increase in Caltex's presence would increase the likelihood of stable price increases particularly compared to a situation where some or all of the sites are acquired by more maverick or aggressive retailers," Mr Samuel said.

According to an ACCC Statement of Issues and based on information provided by Mobil, the ACCC expects that Mobil will exit its retail business in Australia within the next two to three years.

With the sale to Caltex blocked, Mobil will struggle to find any single buyer from the major retailers acceptable to the ACCC. Its existing sites are likely to be sold in parcels to both independent retailers and franchises and some, no doubt, to the larger retailers.

In related news, the Australian Federal Government has asked the ACCC to investigate possible price fixing in the petrol retail market, concerned that petrol companies may have been colluding to set a weekly price cycle.

"The government has asked the ACCC to assess whether co-ordinated activity among major oil companies is affecting the pattern and height of the regular price cycle to the detriment of motorists," Competition Policy Minister Dr Craig Emerson said this week.

TMR Comments

Finance Calculator

Repayment is : $

Latest Comments
The size of your tyre is located on the sidewall of your tyre.
It will be similar to the sample below.