CALTEX AUSTRALIA SILENT OVER COMPETITION CLAIMS ON TAKEOVER BID

MELBOURNE, Sep 03, 2009 (AsiaPulse via COMTEX) -- CTXAF | Quote | Chart | News | PowerRating -- Caltex Australia Ltd (ASX:CTX) remains tight-lipped about claims by consumer groups and the competition watchdog that its proposed A$300 million (US$250.08 million) purchase of Mobil service stations could harm competition.

Caltex, one of the nation's four refiners and sellers of petroleum products, wants to buy 302 Mobil fuel outlets, lifting its number of service stations 2,128 across the country.

On Thursday pressure against the move appeared to be growing. Politicians and motoring body NRMA added to earlier concerns about the acquisition proposal from the Australian Competition and Consumer Commission (ACCC).

NRMA motoring and services president Wendy Machin called on the federal government to prevent the purchase.

"The consequences of this acquisition proceeding can only be detrimental for Australian consumers with greater market concentration inevitably leading to higher pump prices," Ms Machin said in a statement.

Independent senator Nick Xenophon called the proposed acquisition a "dud deal" that should not proceed.

On Wednesday the ACCC said it feared the A$300 million acquisition could lessen competition and give Caltex greater control over prices at the bowser.

"The (ACCC's) preliminary view is that Caltex's position as the largest wholesale provider in each state is likely to provide it with the ability to increase wholesale market prices," the ACCC said.

A Caltex spokeswoman on Thursday said the company would respond privately to the ACCC.

"We acknowledge their (ACCC) concerns and we will address those in a confidential submission," she said.

The spokeswoman said the submission would be lodged ahead of a September 16 deadline.

State One Stockbroking energy analyst Peter Kopetz said the ACCC had legitimate concerns about the proposal.

"When you think about the petrol station scenario in Australia, it is owned by very few. There are not many independent operations running," Mr Kopetz said.

"If you keep amalgamating the bigger ones, the power becomes greater to the one that acquires the smaller players, hence competition reduces," he said.

Mr Kopetz said oil companies had a lot of power in terms of pricing.

"How much have we heard about petrol prices themselves over the past five or 10 years?" he said.

Separately, the ACCC released a list of service stations that routinely had the cheapest prices.

The data showed Mobil and Caltex were usually the first to increase prices at the start of the weekly price cycle, resulting in significantly higher petrol prices that its competitors for a few hours.

Caltex, on average, failed to reduce its prices as quickly, or by as much as its rivals.

The ACCC will deliver a final decision on the Mobil service station sale in October and has called for additional submissions from Caltex and other stakeholders in the meantime.

Caltex Australia shares finished Thursday down 15 cents at $12.00.

(AAP) rw

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