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Petrol pump turf fight looms

SERVICE station operators are digging in their heels to fight for survival against new conditions in the industry that could put them out of business.

The changes involve a revised oil code of practice regulating commercial relations between franchised services station and the major oil companies.

The revised code, currently under review by the Federal Government, will affect independents such as Gull and Liberty, more so than the four major players Shell, BP, Mobil and Ampol, which merged recently with Caltex.

The opinion among service station operators is that, if security of tenure is not guaranteed, they may lose their investments in their businesses.

There are currently about 900 service stations operating throughout WA and a large proportion could be affected by the current issue. It is estimated that at least 100 have closed in the past three years.

The principal concern by the Motor Traders Association of WA (MTA-WA) is that most of service station franchise agreements came up for renewal last year, and many have not been renewed.

MTA-WA executive director Bob Draper believes the government will agree to a new oil code and then repeal the two Federal Acts relating to service stations. One of these is the Petroleum Retail Marketing Sites Act 1980 and the other is the Petroleum Retail Marketing Franchise Act 1980.

“Our concern is for our members, because the trend is that they are already being pushed out of the industry with no payment for goodwill,” Mr Draper said.

“If our members have to leave the industry, they must leave with some degree of dignity and a return for their effort. That is why we are being so persistent in fighting this issue.”

Repeal legislation is being reviewed by a Senate committee and was expected to be released on April 20, but this has been delayed until May 12.

Mr Draper believes the repeal of the two Acts will allow the major oil companies to dominate the industry to its detriment and, at same time, force out many service station operators.

“This is already the trend,” he said. “There has already been a fair bit of rationalisation.”

The MTA-WA believes this trend, and the impact yet to come, will not be in the interests of motorist.

“There will be less incentive to engage in price wars,” he added.

Operators would lose their income and many employees would lose their jobs.

There are a number of reasons why station proprietors are leaving the industry, including Shell’s move to multi-site operation resulting in 70 metropolitan Shell service stations coming under the control of one operator, the closure of sites following the merger of Ampol and Caltex, the implementation by BP of its own form of multi-site operation whereby up to 10 stations will be run by one operator and closure of non-economical sites.

While the MTA-WA accepts rationalisation is inevitable, it wants to ensure members leaving the industry are treated fairly and with due regard for the efforts they have put into their business.

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