Wednesday, November 4, 1998

New Oahu gas
retailer vows
low prices

B.C. Oil, which is taking over
27 Texaco stations, will sell under
the Arco brand

By Rob Perez


The company positioned to take over operations of Oahu's 27 Texaco service stations says it plans to woo customers to a new brand of gasoline in Hawaii with lower prices than the rest of the market.

"We're going to be very aggressive, more than anybody has seen on this island," said Hani Baskaron, president of B.C. Oil Ventures of Orange, Calif. "All consumers will be very pleased with our prices."

Baskaron declined to say how much below market his pump prices will be, noting he still is discussing leases for dealers who run 10 stations. The other 17, he said, will be run by the company.

Selling under the Arco brand, B.C. Oil plans to operate the stations for U.S. Restaurant Properties Inc., a Dallas company that in August agreed to purchase the Texaco stations and an Oahu terminal for an undisclosed price.

The sale still needs approval from the state attorney general's office, which required either Texaco Inc. or Shell Oil Co. to sell its Oahu assets as a condition for merging marketing operations nationally. The companies decided the Texaco assets would be sold.

A spokesman for the AG's office could not be reached yesterday for comment. The office was closed because of the state's Election Day holiday.

Scott Loll, spokesman for Atlantic Richfield Co. in Los Angeles, said his company and B.C. Oil have agreed to terms on a licensing agreement under which B.C. Oil can operate the stations using the Arco name. But Arco will not be supplying the gas, he said.

Baskaron said he has an agreement with Chevron Corp. to purchase gas from Chevron's refinery on Oahu. He said the price would not be tied to a local benchmark, which the state and others have claimed is excessively high. But he declined to elaborate.

"We made the best deal possible," Baskaron said.

When the Texaco-Shell divestiture was ordered to address antitrust concerns, the AG's office and other critics of Hawaii's high wholesale gas prices had hoped the eventual buyer would import less expensive gas, bringing a new player -- and new competition -- to the wholesale market. Most of the state's gas comes from Oahu's two refineries.

The state last month sued the major oil companies here, claiming they have conspired to keep prices artificially high. The companies have denied the allegation.

Tim Hamilton, a mainland petroleum consultant and dealer lobbyist, said the B.C. Oil deal won't alleviate the problem of inflated wholesale prices.

The company might be able to undersell competitors by a few cents at the retail level, but that will do nothing to shake up the major players' hold on the wholesale market, Hamilton said. "It's like a Little League player coming in and threatening the San Francisco Giants," he said.

Once Baskaron began discussions with Texaco dealers, some dealer representatives complained that the proposed leases he was floating were unfair. But Baskaron said dealers are getting good agreements. "They have a much better deal than they ever had with Texaco," he said.

Beverly Harbin, president of the Hawaii Automobile Repair & Gas Dealers Association, which represents the Texaco dealers, declined comment.


The pending deal

Bullet Assets: 27 Oahu Texaco stations
Bullet Buyer: U.S. Restaurant Properties
Bullet Operator: B.C. Oil Ventures
Bullet Brand name: Arco
Bullet Gas supplier: Chevron

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