"How can a sole trader petrol station compete with Coles and Woolies who use supermarket profits to lower petrol prices?"
Before Coles and Woolworth own their petrol stations, the multinational owned petrol stations were already squeezing out independent petrol station owners.
The issue is, and this is an issue that the free marketeers have to make up their own mind: do you want free competition in a free market, or do you prefer some government regulation and intervention to protect the smaller players from their big, and usually multinational, competitors ?
You can't pick and choose, depending on how it affects your self interests.
