RETAIL giant Costco is set to spark a petrol price war as it forges ahead with a plan to roll out its own discount fuel outlets.
Queenslanders could be the first to queue for cut-price fuel sold by the US retailer, with the Newman Government about to decide whether the state's first Costco outlet will be given the green light.
An approval would help pave the way for other proposed Costco outlets to offer discount fuel to motorists who pay their $60 store membership.
It would also challenge the grip by Woolworths and Coles on petrol sales by potentially undercutting contentious shopper docket discount petrol schemes.
Costco would need to sell petrol at least 5c a litre cheaper than its competitors to attract motorists and RACQ manager of public policy Michael Roth predicted the chain could initially offer unleaded fuel for as low as 99c a litre to lure shoppers to the store.
Costco has run similar customer engagement schemes overseas.
Chris Kable, of FUELtrac, which monitors prices around the country, said the plan would ramp up the already fierce supermarket price wars, with motorists to win in the short-term.
"Coles and Woolworths won't want Costco to get a foothold in Australia without a fight," Mr Kable said.
"There will be more competition and that generally squeezes prices. What you would probably see is more of the 8c-a-litre discounts than you saw before."
Costco plans to roll out its first petrol outlet at either North Lakes, north of Brisbane, or Sydney, depending on which gains planning approval first.
The chain's general manager for Australia, Patrick Noone, said much hinged on the North Lakes store getting planning approval.
"If we can get this one through to planning then we will start looking seriously at other sites," he said. "We would be in direct competition with everybody else in the retail petrol market."
Costco aims to use its market power as the world's seventh-biggest retailer to find a supplier and sell fuel under its own banner rather than teaming up with an existing petrol company, as both Coles and Woolworths have done.
Deputy Premier Jeff Seeney, who will decide on the North Lakes proposal by February, said the more competition in the Queensland petrol market, the better.
The Newman Government called in Costco's plans this month in a bid to fast-track the store after a court appeal threatened to stall the project.
RACQ's Mr Roth has now called on other retailers, such as Aldi, to follow Costco's lead by entering the petrol market.
Costco's petrol business in the US grew 20 per cent this year after selling more than $US10 billion ($9.64 billion) of petrol in its 360 fuel outlets.
But FUELtrac believes Costco's local plans would have more impact on lowering fuel prices if it found a partner.
Costco's petrol plans come as the Australian Competition and Consumer Commission investigates whether retail petrol docket discounts disadvantage consumers in the long term by chasing out the competition and driving up prices for motorists who do not use shopper dockets.
While fuel prices are expected to dip in coming weeks, unleaded has soared from about $1 a litre seven years ago to more than $1.50 a litre this year.
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