(Adds details from ACCC statement, impact on Caltex, Woolworths comment)
Dec 14 (Reuters) - Australia's antitrust regulator said on Thursday that it would oppose the A$1.8 billion ($1.4 billion) acquisition of Woolworths Ltd's WOW.AX network of retail service station sites by oil company BP Plc BP.L .
"We consider that BP acquiring Woolworths' service stations will be likely to substantially lessen competition in the retail supply of fuel," the Australian Competition and Consumer Commission Chairman Rod Sims said in a statement.
Woolworths and BP announced the deal in December 2016, as the Australian retailer sought to cut non-core businesses and focus on its supermarkets. found that the acquisition would likely lead to higher prices and reduce competition.
"Reduced competition will also mean that prices will not fall as far, or as quickly, in the discounting phase of the cycle," Sims said.
Woolworths said in a statement that it was "disappointed" by the ACCC's decision and would assess its options with BP.
The regulator's move could be good news for Caltex Australia CTX.AX , which stands to lose its fuel supply contract with Woolworths if the deal goes through. Loss of the contract would cost Caltex A$150 million in annual earnings, it said in August.
Caltex had no immediate comment on the ACCC's decision. ($1 = 1.3103 Australian dollars)