Wednesday, April 7, 1999


changes gears,
drops gas prices

It lowers its wholesale rate
after a recent increase apparently
because rivals failed to follow suit

By Rob Perez


Chevron Corp., which only a week and a half ago raised wholesale gas prices to its Oahu dealers, has lowered them.

Hawaii's leader in the retail gasoline market yesterday dropped its wholesale price 2 cents a gallon, to 83 cents for regular unleaded (excluding taxes).

That came in the wake of a March 27 increase of 3 cents -- the first for the company in about a year and a half.

Chevron spokesman Albert Chee Jr. said the company doesn't comment on specifics of why it makes price changes.

"We make our pricing decisions based on free market forces of supply and demand," he said.

But some in the industry speculated that Chevron took back some of the recent increase because not all Hawaii's other gas suppliers followed Chevron's move, as they usually have done in the past.

That left Chevron dealers with generally the highest pump prices in the market, hurting volume, said Chevron dealer Frank Young, who has seen his gas sales drop about 30 percent since February.

Young said customers have told him they were switching to competitor stations because of lower prices.

Following yesterday's wholesale 2-cent drop, Young lowered his pump prices by the same amount.

Chevron had been criticized for being quick to raise wholesale prices when oil costs were going up but for acting more slowly when oil prices were going down.

Shell dealer Bill Green said having an oil company decrease its Hawaii prices so soon after an increase isn't unprecedented.

"It doesn't happen a lot, but I've seen it occur several times," he said.

Green said Shell raised its dealer wholesale price 2 cents a gallon several days after the March 27 Chevron increase.

But he hadn't received notification by yesterday afternoon of a price decrease.

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