Gull mulling move South

Cut-price fuel retailer Gull says it is investigating ways to move into the South Island.

General manager Dave Bodger said he had ''strong aspirations'' to set up outlets in the South Island but oil companies were reluctant to sell Gull fuel to service the island.

Mr Bodger said to open outlets in the South Island Gull would need to build a fuel terminal at a South Island port, which could cost up to $50 million.

''We need to have access to fuel and we need fuel on the side of the wharf; somewhere on the east coast of the South Island would be awesome,'' Mr Bodger said.

Gull imports fully refined fuel into its fuel terminal in Mount Maunganui, and the most southern Gull outlet is in Masterton.

''It's a long way from Kaikorai Valley to buy a tank-full,'' he said.

An oil terminal in Port Chalmers was unlikely, Mr Bodger said.

''You can't bring a decent size ship in there - it'll touch the bottom on the way in.''

A fuel terminal at Lyttelton or Timaru was more likely, but Bluff had not been ruled out, he said.

Low-priced Gull outlets have forced petrol discounting among retailers in the North Island, prices being up to 22c a litre cheaper than in Dunedin.

Z Energy spokeswoman Christine Langdon said this week the cheapest 91-octane petrol price from its forecourts in New Zealand was in Whangarei, at $1.95 a litre.

The ''aggressive competition'' had petrol stations matching prices to remain competitive, she said.

Z Energy also had ''intense discounting'' in areas of Auckland and Tauranga.

The price for 91-octane petrol in Dunedin this week was $2.17 a litre, or the ''national port price'', the same price as at about 75% of the Z Energy stations in New Zealand, she said.

A price of $1.95 nationwide was ''economically unsustainable''.

''Our net profit is about 4c a litre, so we wouldn't be able to charge that price everywhere.''

Z Energy needed the profit margin to deliver a fair return to its shareholders and invest in infrastructure and business, she said. New Zealand Automobile Association senior policy analyst Mark Stockdale described it as the ''Gull effect'' - a discounting ripple effect around low-priced Gull outlets.

''Their prices are always lower and leads to other stations matching those prices.''

The ''lean operation'' of Gull outlets, such as some being self-service, allowed it to offer cheaper prices than bigger fuel retailers, Mr Stockdale said.

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