Customers Win In Shake-Up Of Petrol Industry
12 April 2002
BP today said the Government report on independent petrol retailing confirms that motorists are benefitting from deregulation of the industry.
The Motor Trade Association (MTA) had called for a report into independent fuel retailing.
Since the 1970s, about 2400 service stations have closed as the industry rationalised.
The report, written by the NZIER, concluded that while low volume service stations had become uneconomic, their closure had not reduced competition nor was it unfairly threatening rural communities.
The report recommended that no intervention be taken.
BP Managing Director Peter Griffiths said petrol retailing had changed dramatically in the 14 years since regulation.
“The reality is that some smaller service stations haven’t been able to survive in what has become a cut-throat market. Everyone selling petrol has taken a cut in profit and been forced to diversify or reduce operating costs in order to make it. Unfortunately, not all service stations can do that.”
Mr Griffiths said his company had invested millions last year in convenience retailing through 24 modern BP Connect service stations in order to make up for declining margins on fuel.
BP New Zealand had also cut its own business costs by nearly 50% to enable it to continue operating in this market.
Mr Griffiths said it was motorists who had benefited from changes to the industry through better prices, price discounting, loyalty programmes and promotions.