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Caltex Australia to buy Mobil stations -

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PETER CAVE: Caltex Australia has announced it'll buy 302 Mobil service stations around the country
as it seeks to expand its footprint in the retail fuel market.

The $300-million acquisition - which still needs Foreign Investment Review Board approval - has the
support of some investors, with Caltex shares surging in morning trade.

But the proposed deal has already fired up debate about competition in Australia.

The Nationals Senator Barnaby Joyce has urged the Competition Policy and Consumer Affairs Minister
Chris Bowen and the Prime Minister to reject the deal.

He told ABC TV, Mr Bowen and Mr Rudd were beholden to the oil companies.

BARNABY JOYCE: They have Mr Bowen where they want him. They have Mr Rudd where they want him. None
of these people have the capacity, the strength, the conviction or the courage to take on the oil
companies and for Australia, this is getting ridiculous.

The centralisation of our marketplace, we now have the highest food inflation in the western world.
Soon you'll be held over a barrel with fuel, you know and on top of that we've got an ETS
(emissions trading scheme) and debt that we can't even jump over.

This is getting bizarre.

PETER CAVE: Barnaby Joyce, who was recently joined by the independent Senator Nick Xenophon in
launching a private members bill to stop large petrol companies from forcing independent service
stations out of business.

A short time ago Senator Xenophon spoke to our reporter Bronwyn Herbert.

NICK XENOPHON: It is not good news for consumers in the sense that you will have fewer players in
the marketplace. It will mean more pressure on the independents and that's why last week I
announced that Barnaby Joyce moves to change the laws so that you don't have geographic price
discrimination because right now the big four oil companies can pick on the little guys.

They can discount in one area and not another. Invariably and often it is the case of the
independent operators being put under more pressure with discounting that independent operators see
as unsustainable in their area but not in another.

BRONWYN HERBERT: Do you believe this move by Caltex actually gives your bill more creditability?

NICK XENOPHON: Well, I think the bill had a fair bit of credibility to start off with but it does
indicate the urgency of tackling this issue.

Just a few days ago it was reported that Graham Samuel, the chair of the ACCC(Australian
Competition and Consumer Commission), rued the might of the major banks, how we've seen a further
consolidation of market share of the big four banks, and that I think we haven't got it right in
terms of banking sector and it has been bad for consumers.

We're seeing something similar here with this proposed takeover. I can't see how it is in the
interests of consumers.

What we need to be looking at is further diversification in the fuel market so that there's greater
wholesale competition and greater retail competition, and having Caltex taking over over 300
service stations from Mobil won't be good for consumers.

BRONWYN HERBERT: Caltex argues it is only a small player compared to many of the other companies so
this buy-out isn't going to have a significant impact on competition.

NICK XENOPHON: Well, it will mean one of the big four oil companies will take over 300 outlets. To
say that they're not a big player is a little cute when you consider the vertical integration in
terms of their wholesale operations.

This will mean less diversity in the market place, less choice for consumers ultimately and what we
need to be looking at is a wholesale review of competition laws so that consumers do have a maximum
amount of choice because if there is more competition, that's good for a downward pressure on
prices.

PETER CAVE: Independent Senator Nick Xenophon, speaking to Bronwyn Herbert.