This is a case study of how one remote Australian community saved their
after a major oil company decided to decommission
their only retail fuel outlet in 2004.
The Victorian town of
is located 400 km west of Melbourne on the
Western Highway to Adelaide, and is the last town before the South Australian
border. The nearest town is Nhill, 40 km to the
Like other Australian small rural towns, the continuing centralisation of
services to larger towns and regional centres
has had a great impact upon the distances Kaniva residents' face in travelling
to access these services, particularly the elderly and infirm.
Community leaders feared that losing the town's only fuel outlet will increase
population drift from Kaniva to larger towns and regional
centres, threatening businesses and jobs that are needed to sustain the
viability of the community.
In mid 2002, an administrator was appointed to run Balgee
Oil, a Ballarat based regional fuel distributor, which operated the Kaniva
petrol station for Mobil Australia.
In April 2004, after failing to find a buyer for the service
station, the administrator decided to close the business.
The closure of the petrol station would have resulted in Kaniva's 900 residents
having an 80km round trip to purchase fuel from the nearest outlet in Nhill.
In response to community concern, the Shire of West Wimmera brokered a deal
Scott's Petroleum of Mount Gambier and Mobil Australia to continue to have the
until a local buyer was found. Eighteen Kaniva residents and businesses formed
to take the
position of "buyer of last resort" if no buyer came forward.
Following a burglary at the petrol station in September 2004, Scotts
Petroleum withdrew from the
business. With no buyer coming forward, the group, acting on legal advice,
formed a proprietary
Kaniva Community Roadhouse Pty Ltd (KCR), to buy the site. Members of the group
contributed $82,000 towards the estimated $400,000 needed to purchase and
retank the site and fund the business.
After reviewing the viability of the business, KCR entered into a
contract to purchase the land and building. Mobil then signed an agency
agreement with the company for the supply of fuel until settlement took
place after the removal of the old fuel tanks later in the year.
Why form a co-operative?
The limitations of a proprietary company soon became apparent to KCR, which
threatened to scuttle the project. Up to
200 Kaniva residents, businesses and community groups had previously offered
to support the purchase of the fuel outlet, however, a proprietary company can
no more that 50 non employee
With the prohibitive
of forming an unlisted public company, the KCR board decided to explore the
forming a co-operative, which does not have the same
restrictions as a
After receiving an urgent call for help, Co-operative Development Services Ltd
director, Tony Gill, meet with the KCR board of directors and
canvessed various options for forming a co-operative. The preferred option was
to convert the
company to a co-operative, however, due the anticipated time delay in
company, the board decided to form a new entity, with KCR to become a subsidiary
of the co-operative, holding title to the site.
KCR engaged CDS in October 2004 to
organise the registration of a
involved holding meetings with the KCR board, drafting rules that met the
specific requirements of the enterprise, preparing a disclosure statement which
would satisfy Consumer Affairs Victoria and chairing a public meeting to form
Nearly 200 Kaniva residents attended the formation meeting on 7 December 2004
pledged over $280,000 to the enterprise. The
Kaniva Community Co-operative Ltd
was subsequently registered on 14 December 2004.
After a setback upon the removal of the old fuel
tanks, the petrol station was reopened in May 2005 as a community enterprise.