Australian grocery wholesaler Metcash Trading is reported to be in discussions with a number of petrol retailers over a possible strategic alliance.

Metcash is understood to be in talks with Mobil, Caltex and BP and may be in a position to announce a deal next month. Metcash wants to set up a discount petrol offer for its IGA (Independent Grocers of Australia) in a bid to compete with petrol discount schemes run by rivals Woolworths and Coles Myer, reported the Australian.

Woolworths offers its customers a 4c per litre petrol discount when A$30 (US$20.4) is spent at its stores.

Coles Myer, which recently announced it had made a deal with Shell, is to unveil its petrol discount offer within the next few weeks.

Metcash chief Andrew Reitzer declined to comment on the identity of any potential partners and said nothing had been finalised. "We are in discussions with more than two parties," he was quoted by the Australian as saying. "It's a very fluid situation right at the moment".