The Commerce Commission's decision to allow Z Energy to buy Caltex will undermine the competition in the fuel industry, Labour's consumer affairs spokesperson David Shearer says.
Z Energy has been given the green light to purchase competitor Chevron, as long as it sells 19 of its service stations and one truck stop.
The Commerce Commission says the loss of Chevron, which operates the Caltex and Challenge brands, would "not substantially lessen competition".
"The Commerce Commission has allowed just two supermarket companies to dominate New Zealand's grocery industry, while just two major construction supply companies have cornered the market for building materials," says Mr Shearer.
He says while it's comforting Z Energy is New Zealand owned, it now owns around 50 percent of all petrol outlets.
"This decision undermines the Commerce Commission's own guidelines which highlight industry dominance of over 40 percent as a red flag."
The Commission was divided with its decisions, with one commissioner dissenting from the majority, Mr Shearer says.
"There has been concern in recent months that when oil prices have dropped, companies have been slow to pass those savings onto customers, and with the exception of Gull, have operated as a pack."