Petrol Price War

Reporter: Chris Simond

Ron Bowden from the Service Stations Association said government legislation from the 1980s designed to prevent oil companies from controlling the market and setting the prices is about to be overturned.

"They eliminate the competition that annoys them and then prices go up, no price controls at all," Mr Bowden said.

"We don't understand why the government is preparing to hand over the possibility of total control to the oil companies and to the supermarkets."

Crippling Australian fuel costs have not only become a fact of life, they may now become an ongoing certainty.

From the 6500 service stations across Australia, just over 1000 are responsible for almost half the nation's petrol sales.

This is because of the burgeoning supermarket duopoly where the Coles/Shell arrangement has now stretched to 580 outlets and the Woolworths/Caltex association now boasts 470 sites.

While combined they may only represent 16 per cent of the nation's service stations, they sell almost 45 per cent, leaving 3000 independent operators who will be struggling to survive. Controversial Queensland Senator, Barnaby Joyce, said if there are not major changes to this government proposal, we will see a wave of service station closures."I think Coles and Woolworths should be part of the code and restricted in some way as to the portion of the market they control," Senator Joyce said. "They'll go out of business because there won't be the legislative requirement to restrict the hold that the oil companies have on the market." As pump prices here creep north on a daily basis, it is perhaps no consolation but the rest of the world's suffering too.

In the USA, George W Bush is so concerned that he called for an inquiry into rocketing fuel prices and launched a full investigation into price gouging, perhaps not surprising when you hear the combined profits of American oil companies this year is expected to be $134 billion.

In Australia, the percentage break up shows that from $1.39 per litre, 50.9c goes in tax, the actual product cost is 77.9c and the retail margin 11.1c.