The warning came as Neil Hamilton, corporate affairs minister, announced that oil companies would be released from undertakings that restricted their power to control licensee-run shops.
But the association said the changes would enable oil companies to force through price rises in forecourt shops and prevent licensees from using local suppliers.
Bruce Petter, its director, said: 'The licensees strongly oppose the changes. They develop business from the shops but they will be subject to considerable interference from the oil companies. It will raise prices and damage small local suppliers to the shops.
'The minister has relaxed the undertakings without proper research into the convenience store market.' The association, which estimates there are 3,000 licensees, says the undertakings should be retained.
Mr Hamilton said the undertakings, introduced 30 years ago, were no longer necessary to maintain adequate competition and were in the 'best interests of industry and consumers'. In future they would apply only to sites owned by independent retailers.
The Government is also retaining rules limiting petrol supply agreements between oil companies and forecourt operators.
The Office of Fair Trading will again review competition in the sector in 1997.Reuse content