A multi-million dollar deal will see Viva Energy become Australia’s largest fuel retailer as Coles retires from the fuel business after nearly 20 years. What does this mean for gas prices?
After nearly two decades in the fuel business and building a reputation as one of the nation’s most expensive gasoline suppliers, 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 $300 million deal.
Despite the change, Viva says Coles will continue to supply convenience stores with essential grocery products – and the four cents a liter fuel discount cards and Flybuys loyalty program will remain in place.
The 4 cents per liter rebate – available with a minimum purchase of $30 at Coles supermarkets – pales in comparison to the forthcoming fuel excise tax changeover.
The newly elected federal government will reinstate the missing half of the fuel tax, temporarily wiped out by the previous government ahead of the election amid soaring gasoline prices.
Meanwhile, industry analysts aren’t sure what the Viva acquisition will do to gasoline prices, even adjusted for the full fuel tax.
Research by Australia’s leading consumer protection agency revealed that Coles Express petrol stations were the most popular outlets for many years.
The multi-million dollar deal with Coles will result in Viva Energy becoming Australia’s largest fuel retailer, with a total of 710 locations across the country – with the network set to continue to grow in the coming years.
Viva currently holds a 50% minority interest in Liberty Fuel and has the right to fully take over the business from 2025 – further increasing the company’s presence in regional areas.
With almost 20 years under his belt, Coles has not commented on the reasons for his exit from the fuel business.
Some analysts have suggested that this could be a move to underscore its commitment to the environment. Others have suggested Coles is making an early call amid the market shift towards electric cars.
It’s also possible that Coles is making more money than he made under his previous ownership by continuing to sell his groceries and other related goods to the petrol giant.
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