BP's proposed $1.3 billion takeover of Woolworths petrol stations in Australia has been blocked by competition regulators who concluded that the oil major was likely to raise fuel prices.
Having announced in August that it needed more time to consider its verdict, the competition watchdog has now confirmed its position to oppose the deal, citing major concerns over future fuel prices.
He said BP prices were significantly higher on average than Woolworths in Australia's major cities and it also hiked the cost of petrol faster, and discounted it more slowly during cost cycles. Many consumers seeking out cheaper petrol will head to Woolworths petrol stations.
Mr Sims said that fuel prices would be likely to increase at the Woolworths sites, if they were to be acquired by BP causing other retailers to suffer from less competitive pressure.
"The ACCC has stated in its announcement, and we agree, that if the acquisition was to proceed, motorists will end up paying more for petrol".
BP said was was disappointed by the announcement fromthe ACCC.
But the proposed move hasn't been met with enthusiasm by the Australian Competition and Consumer Commission (ACCC).
The Australian Automobile Association (AAA) has welcomed the ACCC's opposition to the plan.
Mr Holmes said the company was confident that, with the appropriate divestments that the transaction would not lessen competition substantially.
She added: "The BP-branded sites operate in competition with Woolworths and Woolworths/Caltex-branded sites". "In light of this, we are now consulting with our lawyers to determine our next steps", said BP Australia President Andy Holmes.
According to the ACCC, BP already supplies fuel to around 1,400 BP-branded service stations nationally, and has direct control over setting the prices at around 350 of those sites.
In its latest Annual Report, Woolworths disclosed that on 24th December 2016 it entered into a binding agreement with BP, to sell its 527 "fuel convenience sites" and 16 "committed development sites".