THE STATE'S monopolies watchdog has signalled it will boost competition in the motor fuel market by making it easier for service stations to switch suppliers.

An overall ban on exclusive agreements between suppliers and retailers does not apply to most service stations and the oil com-panies that supply them.

However, the Competition Authority signalled yesterday that this exemption could change in two years.

In 1993, the authority gave a special licence allowing oil com-panies to tie service stations into exclusive agreements. This was due to expire yesterday.

The Competition Authority issued a statement yesterday saying that it has made a de- claration that will renew this type of licence for a further two years, at which point it is proposing to review it.

"The main impact of the proposed change will be to substantially increase the ease with which independent petrol stations can move between suppliers," the authority's statement said.

"This will enable low-cost suppliers to target the most lucrative independent petrol stations to move over to them, encouraging more competition at the pump for consumers."

The authority also said that it will remove a ban on maximum resale price maintenance.

"The declaration will now apply to agreements where the supplier specifies a certain price above which motor fuels must not be sold by retailers," the authority said.

Monopolies law bans exclusive supply agreements because they can distort competition.

However, the exemption was granted to some petrol and diesel supply agreements, because the suppliers, that is the oil companies, supplied pumps, storage tanks and other equipment to independent service stations.

The exemption applies where the supplier makes a substantial investment in the retailer's overall business.