OIL refiner Caltex plans to buy more than 300 service stations from Mobil, sparking fears the company could turn into a fuel-market monster that could hinder competition and force up petrol prices.
Caltex will buy Mobil's 302 Australian service stations for about $300 million.
Caltex says the acquisition, subject to approvals by the Australian Competition and Consumer Commission and Foreign Investment Review Board, will enable it to better compete against big retailers Woolworths, Coles Express and BP.
But the prospect of a deal has sparked concern among some politicians and motoring groups, which believe it could lead to higher fuel prices.
According to the ACCC's 2007 petrol pricing report, Coles Express had 22 per cent of the petrol retail market, Woolworths 22 per cent, BP 19 per cent, Caltex 16 per cent, Mobil 11 per cent, other independents 7 per cent and Shell 3 per cent.
Caltex said it had estimated its market share after the acquisition would be 22 per cent, although it does have an existing alliance with Woolworths.
The RACV fears the refiner could gain too big a market share. Spokesman David Cumming said: "Our concern would be that … you have actually created a monster which would lead to less competition. The ACCC will have to look at this with a fine-tooth comb.
"Longer-term it probably isn't beneficial for motorists and it might be better if the Mobil stations were broken up and sold to different ownership groups."
Nationals senator Barnaby Joyce said more concentration in the market could result in customers being exploited further.
"This is ridiculous. We keep centralising back the marketplace, now we are going to have a couple of retailers, a couple of fuel stations, and an ETS - what a wonderful economy we're getting," he told the ABC.
Independent senator Nick Xenophon urged the competition watchdog to reject the deal.
"If this deal goes ahead … there will effectively be one joint operation that will control 44 per cent of retail outlets in the country," he said.
"That, under any reasoning, can't be good for competition and can't be good for consumers."
Family First senator Steve Fielding agreed. "The ACCC should be increasing competition, not letting it decrease or even stay the same," he said.
But Caltex government relations manager Frank Topham said the deal would increase competition, taking Caltex "from being significantly smaller in market share at present to being able to go head-to-head with the major supermarket chains and BP".
A spokesman for Consumer Affairs Minister Chris Bowen said the acquisition was a matter for the ACCC. The commission will begin taking submissions today.
With PETER MARTIN
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