A multimillion-dollar deal will result in Viva Energy becoming Australia’s largest fuel retailer, as Coles bows out of the petrol business after almost 20 years. So, what does this mean for petrol prices?
After almost two decades in the fuel business and establishing a reputation as one of the most expensive petrol providers in the nation, Coles has announced that it is selling its network of convenience stores to Viva Energy – the operator and supplier of Shell products in Australia – in a deal worth $300 million.
Despite the change, Viva says Coles will continue to supply the convenience stores with basic grocery products – and the four cents per liter fuel discount dockets and Flybuys loyalty program are set to remain.
The 4 cents per-liter discount – available after a minimum spend of $30 in Coles supermarkets – pales in comparison to the upcoming fuel excise reversion.
The newly-elected Federal Government is set to reinstate the missing half of the fuel excise that was temporarily wiped by the previous administration in the lead-up to the election amid skyrocketing petrol prices.
Meanwhile, industry analysts are unsure what the Viva takeover will do to petrol prices, even once adjusted for the full fuel excise.
Research by Australia’s top consumer watchdog found Coles Express fuel stations were for many years the dearest outlets.
The multimillion-dollar deal with Coles will result in Viva Energy becoming Australia’s largest fuel retailer, totaling 710 sites across the country – with the network set to grow in the coming years.
Viva currently has a 50 percent non-controlling interest in Liberty fuel, with rights to fully acquire the business from 2025 – further increasing the company’s footprint across regional areas.
With almost 20 years under its belt, Coles has not commented on the reasoning behind its exit from the fuel business.
Some analysts have suggested it could be a move to underline its commitment to the environment. Others have suggested Coles is making an early call amid the market shift to electric cars.
It is also possible that Coles stands to make more money than it has under its previous ownership, by continuing to sell its groceries and other related goods to the petrol giant.