The world will eventually run out of oil. Peak oil means there comes a time when the maximum rate of global petroleum extraction is reached and then production enters into terminal decline. We all know how important the price of oil is and today, 7-Eleven have agreed to buy 295 Mobile Service Stations from Exxon Mobil Corp which will make them the largest independent fuel retailer.
The Australian 7-Eleven is a family owned business held by the Withers and Barlow families which brought the brand to Australia in 1976 through a licence agreement with the US company, then known as Southland Corp. This new deal will take the number of 7-eleven stores in Australia from 400 to 650.
Caltex wanted to buy 302 service stations from Texas-based Exxon Mobil for $330 million but the ACCC knocked them back and thank God they did. Finally, the ACCC has done something right for a change by allowing more independents into the mix. We need more independents because they have to be aggressive on price to survive and volume is paramount so pricing can be cheaper.
Shell supplies Coles and Caltex supplies Woolworths. Between them and the oil companies they have - wait for it - 93% of the retail market between them. Since Australian wholesale and retail petrol prices are calculated by an international price benchmark in Singapore, our petrol prices go up and down. But the thing that really drives us all mad is that when a rise occurs in Singapore, it's passed on to us straight away but when it falls, it takes much longer to flow through. I smell a rat somewhere and I bet you do too, we are simply being ripped off. An example, the benchmark in Singapore fell by $10 a barrel during the past 3 weeks but the price of petrol has fallen very slowly over that time. It's called getting screwed.
Up to now, the ACCC has been sitting back and watching it all go on but now with 7-Eleven's 295 independent servos in the pipeline, it should become a bit fairer, not much, but a bit.
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