Tedcastles Oil Products is to spend up to £1.6 million developing a new petrol retailing brand. Using the name TOP, the company hopes that over 120 forecourts nationwide will be operating under the brand by the end of the year.

Around half of the petrol outlets will include new convenience stores. Tedcastle is an Irish-owned company which is best known for its home heating oil, although it already has a presence in the petrol retailing business.

Tedcastles general manager Mr Eamon Brandon said the company would be competing with the major multinationals. He said the multinationals are restricted in their "manoeuvreability" because policies are dictated from abroad.

He said that because Tedcastles is a local Irish company it will be closer to the customer and could respond quicker to customer needs. He said there is huge competition among the big companies for customers and they operate various incentives including loyalty cards and points systems.

However, Mr Brandon said many customers do not want special offers. He said 50 per cent of the market was not being served in terms of their requirements, including family drivers, women motorists and rural drivers. Mr Brandon said the petrol stations had been designed following extensive market research on the issue. He is also bringing his own experience in the market to bear - having work with Jet Oil for 29 years.

"A number of petrol retailers whose contracts have expired with other oil companies will be joining us," he said.

The company currently has around 3 per cent of the petrol retailing market and hopes its new initiative will see this rise to around 10 per cent, over a five-year period.

The garages with shops will trade under the names of local dealers, Mr Brandon said. "We don't anticipate symbol groups coming in." He said TOP was currently negotiating sources of grocery supplies.

Competition in the petrol retailing sector has intensified over the past number of years. Oil companies have, simultaneously, spent huge amounts of money upgrading garages and forecourts. The estimated current market share of the major players is as follows: Statoil (24 per cent), Esso (21 per cent), Texaco (18 per cent), Shell (17 per cent), Maxol (14 per cent), Tedcastles (4 per cent), independents (2 per cent).

Sources questioned whether TOP could become big enough to achieve proper economies of scale in a business which has very tight margins. "Most operators are concentrating on getting a large throughput on a smaller number of outlets," said one source. "TOP seems to be doing it the other way around."

Sources also said TOP could find it difficult to develop the retail shop aspect of the business without a symbol or good brand name. The general trend is towards brands or symbols. "You need good suppliers and distributors to make the shops work," said one source.

Tedcastles Oil Products was founded 200 years ago and began trading as Tedcastle McCormick. It is owned by Tedcastle Holdings Ltd, a private company run by Mr Shane Reihill and his father Mr Frank Rehill.