Possible Sale Of Challenge Network Concerns AA

The Automobile Association says the Commerce Commission must ensure that motorists are not the losers if the Challenge service station network is sold as part of the divestment of Fletcher Challenge Energy assets.

“We are concerned about what effects the possible disappearance of Challenge might have on future pump prices,” the Association’s Director of Public Affairs, George Fairbairn, said today.

“There is no doubt the arrival of the Challenge network in April 1998 was a huge shot in the arm for competition in the New Zealand oil industry.

“Everywhere Challenge opened a new station, its aggressive pricing forced its competitors to follow suit. For the first time motorists enjoyed the price benefits that had been promised, when the oil industry was deregulated ten years earlier.

“After a year of regular price increases motorists tend to forget the gains that the new players brought. However, I am certain that if Challenge, and more recently Gull, had not entered the marketplace our pump prices could well be much higher today than they are.

“The benefits of increased competition must not be lost as a result of the sale process.”
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