Aussie fuel giant triples down on unstaffed servos
Cheap fuel is proving a winning formula for Ampol, with the petroleum giant preparing to more than triple its network of discount, unstaffed U-Go service stations across Australia.
The expansion follows approval of Ampol’s $1.1 billion acquisition of EG Australia’s petrol station network, which will add about 470 servos to its footprint.
Ampol is preparing to convert 125 service stations into its discount U-Go format. Louis Trerise/AFR
About 125 of the newly acquired sites are expected to be converted into U-Go stations, a low-cost format where motorists pay at the bowser and sites operate with minimal staffing.
The model has become increasingly popular as Australians look for ways to cut fuel costs.
Ampol currently operates 46 U-Go sites nationwide and 576 service stations under its main brand.
“This transaction is a major step in delivering Ampol’s strategy by strengthening our retail network and enhancing our segmented customer offer,” chief executive Matt Halliday said after the consumer watchdog green-lit Ampol’s EG takeover.
“The performance of our existing U-Go sites also gives us greater confidence in delivering the expected synergies from the transaction and creating value for Ampol shareholders.”
The additional 125 U-Go locations will bring the company’s total number of unstaffed servos to more than 170 stations nationwide.
The expansion comes after months of elevated fuel prices linked to conflict in the Middle East, which disrupted oil and fuel shipments through the Strait of Hormuz and pushed up global energy costs.
While prices have eased since peaking earlier this year, many motorists continue searching for cheaper options at the bowser.
The Australian Competition and Consumer Commission approved the takeover after Ampol agreed to sell 41 service stations to independent retailer Metro Petroleum.
Motorists are increasingly searching for lower fuel prices. Wayne Taylor
Ampol had initially offered to divest 19 sites before increasing that figure to 37 and ultimately 41 during discussions with the regulator.
Metro Petroleum, owned by Dib Group, already operates more than 300 branded service stations across NSW, Victoria, Queensland and Western Australia.
ACCC Commissioner Philip Williams said the regulator had concerns the acquisition could reduce competition in dozens of local fuel markets where Ampol and EG sites overlapped.
“We believe Metro Petroleum’s acquisition of the divested sites would result in the creation, or expansion, of a strong, independent and viable long-term competitor in the 39 local markets,” Williams said.
The ACCC found the acquisition could have substantially reduced competition in 39 local markets without the divestments.
Analysts suggest the mandatory divestments will have little material impact on the deal’s financial outcome, with Ampol still expecting operational savings and earnings benefits once the acquisition is finalised.
According to Halliday, Australia’s fuel supplies remain stable despite ongoing disruption in global energy markets, with sufficient shipments expected to meet demand through winter.
The acquisition is expected to be completed by June 30.
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