BP has scrapped a proposed $1.3 billion (£1bn) takeover of Woolworths’ petrol business in Australia following opposition from competition authorities.

The abandonment of the deal is a setback for the firm’s ambitions to expand its international retail business – if it had gone through, the deal would have been the group’s largest downstream acquisition in more than a decade.

The energy giant already supplies fuel to around 1,400 BP-branded service stations throughout the country, owning and setting fuel prices at approximately 350 of them.

The Australian Competition and Consumer Commission previously said it intended to block the takeover of Woolworths’ 533 sites, as it believed the transaction would lessen competitive pressure on other retailers and lead to higher prices for consumers.

BP initially said it would fight the decision but has been unable to implement appropriate remedies, such as divesting from existing petrol stations.

In a statement the company said: “BP Australia will not continue with the proposed acquisition of Woolworths’ retail fuel and convenience business, originally announced on 28 December 2016.

“Despite its best efforts, BP has determined the transaction cannot be structured to meet its strategic objectives.”