The Commerce Commission has identified a wide range of competition issues it will need to be satisfied about before it will tick the proposed merger of Z Energy and the Chevron NZ, operator of the Caltex chain of petrol stations.
The competition watchdog says it is "generally concerned with the ability of the merged entity to raise prices" right across the New Zealand fuel distribution and retail system, starting at the Marsden Point oil refinery and including aviation, shipping, trucking and retail petrol and diesel fuel sales.
In heavily redacted submissions published on the commission's website, Z argues there is virtually no overlap on either a 2km or 5km radius between Z and Caltex sites and that in markets that involve commercial or wholesale purchases of transport fuels, there are competitive forces already at play that will remain if the merger goes through.
It plans to run the Z and Caltex brands separately, preserving a business model under which Caltex petrol stations are set by head office, unlike Z's, which are set by reference to local competitors' pricing.
In a statement, the commission outlined four broad areas it will consider, along with the potential for existing coordination between major players in the transport fuel sector to be enhanced because of a Z-Chevron tie-up.