ACT News

Woolworths raises petrol prices when Costco turns pumps off - price war on

Woolworths has been slammed as giving motorists a "two-fingered salute" by raising its petrol prices minutes after its new discount competitor, Costco, shuts its bowsers at night.

As soon as the new Costco petrol station turned its pumps off at 9.30pm on Thursday, Woolworths' petrol prices rose 14c to 143.9 cents per litre -- an extra hit of $7 for a 50-litre tank.

Huge lines of motorists wait to refuel at the Majura Park Costco fuel outlet on Saturday.
Huge lines of motorists wait to refuel at the Majura Park Costco fuel outlet on Saturday. Photo: Matt Bedford

Prices were held at the Costco price on Friday -- until just after 10pm when it rose by more than 10c.

NRMA ACT and southern NSW director Alan Evans encouraged motorists to boycott the grocery giant's petrol arm as prices in one eastern suburb were slashed again on Saturday.

"Woolworths behaviour is an absolute disgrace and we recommend to our members to boycott and to give Costco a go and those other service [stations] giving it a go," Mr Evans said.  

"It's shown the absolute disdain they have for Canberra motorists, talk about a two-fingered salute this has to be one of the best," he said.

The opening of the city's Costco petrol station at Majura Park on Thursday was heralded as a breakthrough when it had the immediate effect of forcing the nearby Woolworths Caltex to match unleaded petrol prices of 129.7 cents per litre for motorists with an in store discount, or 133.7 for those without.

Motorists have scored even bigger savings since, with Costco's unleaded price on Saturday at 120.7 cents per litre, down from 123.7 cents on Friday night. Costco Australia managing director Patrick Noone said Woolworths was offering 125.7 cents, or 121.7 for those with a store discount. 

But drivers looking for the slashed prices - matched or only a cent dearer at the Woolworths store - have had to keep an eye on the clock.

Mr Evans welcomed Saturday's prices as the lowest in more than five years but called on the ACT government to ban Woolworths and Coles from gaining access to new petrol station sites in Canberra, repeating its policy for new supermarkets.

"It should only be open to others than those two and the independents to try and generate some real competition in the ACT," he said.

A spokesman for Woolworths confirmed on Friday the price hike was standard practice in response to Costco closing for the night as per the company's policy of following rather than leading the local market. 

Mr Evans said he did not expect the ACCC would take action over the practice.

"When we raise issues about the price differentials in Canberra ... they wring their hands and say 'there's not much we can do'," he said.

The Woolworths spokesman said customers could get an extra 8 cent per litre discount if they spent $30 in a Woolworths and $5 in the service station convenience store.

Mr Noone  said the company, which also has petrol outlets in Adelaide, Sydney and Brisbane, would always aim to offer its members -- who pay $60 to join -- the cheapest prices.

He said it was then for the market to decide whether to follow. 

Mr Evans said Costco's continued discount prices would probably have "a marginal effect" city wide.

"But, because there's a bit of competition round, there will be a gradual decline in prices," he said.  

A Woolworths spokesman declined to comment on Saturday.