Petrol War

Reporter: Jackie Quist

The petrol price war is on with Coles doubling its discount voucher from 4 to 8 cents a litre off at the bowser.

"Until the 30th November any customer that spends $30 in our store will get a fuel discount docket", said Jim Cooper from Coles.

Coles claims its an early Christmas present for shoppers. "And if you then spend $2 in the Coles express store itself, we'll up that to 10c a litre off your fuel bill", Jim added.

Its main competitor was quick to jump aboard -- Woolworths matching the Coles offer, anxious to keep its loyal customers happy,

But its dire news for the already struggling Independents "We cannot match that price at all, there's not enough margin in fuel to give 8c a litre - there's not enough margin to give 4c a litre", Independent operator Craig Glasby.

Craig is President of the Service Station Association. "Before Coles and Woollies came into the market, there were about 7,800 service stations - we're now down to about 5,500 service stations and that's due to the fact that we can't compete with Coles and Woollies. That's just not possible and of course a lot of service stations have to close", Craig said.

Craig claims the success of shopper dockets helped sound the death knell for oil giant Mobil, which has pulled out of Australian retail, selling out last month to 7-11. "They tried to compete with a 4c a litre in store and it just didn't work. They've decided to just shut up shop and get out of retail - they're still going to be here as a wholesaler, but in retail they just can't compete at all", Craig said.

"We're not going to match 8 cents shop a dockets. Its a gimmick and people should see it for what it is. We offer great value every day to the consumers and they should come in and support the Independents", said United Petroleum's David Szymczak.

"Without Independent there'll be no competition is our catch cry and we really believe that. Consumers in Australia are very savvy and they do support Independent. I'd really ask them to continue to support Independents because clearly, the supermarkets are wanting to take over the petrol industry", David added.

"They've got about 50% of the fuel market, with only about 15% of the service stations, so that is a huge amount of fuel to be going through a small amount of service stations", Craig said.

But with interest rates and utilities on the rise, for shoppers, every dollar counts, and the Coles Woollies deal equates to about a $4 saving on fifty litres of fuel. "There is no doubt that the supermarkets make enormous profits in the supermarkets -- there aren't many choices for consumers and with that I guess they're putting up their prices in their supermarkets in order to subsidise their petrol sales", David said.

"The competition across all retailers, large and small, is ferocious. At the moment shoppers are being very cautious with their money and you've got to work very hard to entice them out the door and into your stores. All retailers are working really hard at the moment and shoppers are going to benefit form that - they're the winners", Jim said.