As Chevron nears completion of its $46bn (£32bn) purchase of Texaco, speculation is growing that the new group may pull out of UK petrol retail.
Despite years of marketing efforts and a recent expansion drive, Texaco's performance in the UK has been disappointing. Along with the other majors, Texaco has discovered that the high-tax environment and intensity of competition with the supermarkets have pushed margins to the lowest levels in Europe.
But while other majors such as BP, Esso and Shell have had big enough retail networks to keep volumes high, Texaco, with its smaller network, has found the going much harder. This has raised intense speculation among City and Wall Street analysts and industry insiders that Chevron may abandon Texaco's UK retail presence.
Numerous operators of Texaco stations now fear their jobs could be in jeopardy. One operator, who did not wish to be named, said: "The petrol retail business is in such a state at the moment, you can see why Texaco would want to get out. A lot of us are worried that Texaco is going to pull out of the UK."
Ray Holloway, director of the UK Petrol Retailers' Association, said: "You can tell the industry is in trouble when operators make bigger margins on sandwiches than they do on fuel. It is a vicious environment. Independent operators are going out of business all the time. It can only be a matter of months before Texaco calls it a day here." That opinion is shared by many analysts who say speculation over Texaco's UK future has soared in recent weeks. A City oils analyst said: "All the majors have got their problems with retail, but it would make sense for Chevron to think twice about keeping Texaco in the UK. There's better money to be made elsewhere."
Neither Texaco nor Chevron would comment on the speculation, given the ongoing merger talks.Reuse content