US retailer Costco plans to offer discount petrol at its Australian outlets in a direct challenge to supermarket and budget fuel giants Coles and Woolworths.
The world's eighth largest retailer has requested permission to install fuel pumps at its upcoming second Sydney store and its Brisbane warehouse.
''If you can sell vegemite at a cheaper price on a full pallet, or a kilo tub, why can't we sell gasoline?'' Costco's Australian managing director Patrick Noone said.
Costco has been selling petrol in the United States for a number of years and has used fuel as a drawcard to lure customers.
The firm plans to eventually open up to 20 outlets across Australia and Mr Noone believes they will be able to offer lower fuel prices than Coles and Woolies.
The companies which dominate Australia's budget fuel market offer a four cent per litre discount to customers who have spent at least $30 in their supermarkets.
Costco currently has three Australian stores located in Melbourne, Sydney and Canberra.
To shop at Costco customers must pay a $60 annual membership fee.
Australia's discount petrol market is estimated to be worth $15 billion.
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