A Maili station offers regular
By Rob Perez
unleaded at $1.399 a gallon and
there are hints that other dealers
may go even lower
Star-BulletinOahu's newest gasoline company jumped into the nation's most expensive market with a bang yesterday, immediately offering the island's lowest pump price.
That prompted one competitor to say he would respond with even better deals, suggesting the possibility of a price war.
War or no war, motorists stopping at the new Arco station in Maili now pay $1.399 a gallon for regular unleaded, the lowest pump price on Oahu, excluding military stations.
The Maili facility was one of eight Texaco stations that were converted to Arco yesterday following U.S. Restaurant Properties Inc.'s purchase of Texaco's Oahu assets, which include 27 stations and a storage terminal.
The remaining 19 sites will be changed to Arco stations over the next several days, with the new operators promising to have the lowest prices -- at least at the stations it controls -- of any major oil company here.
B.C. Oil Ventures will operate 17 of the stations for the new owners, while the other 10 will be run by independent dealers under the Arco name. Those dealers will purchase their gas from B.C. Oil but can charge whatever price they want.
Chris Ke-a, an Aiea woman who was buying gas at the Maili station last night, applauded Arco's island debut. "I think it's terrific," she said.
Ke-a, who travels through Maili frequently to visit relatives in Waianae, said she usually doesn't patronize the Maili station, but the $1.399 sign prompted her to stop -- even though her car had plenty of gas.
"At this price, who cares. I'll stop," Ke-a said, pleased with her $7.87 bill for five-plus gallons.
Until yesterday, Lex Brodie's Tire Co. in Kakaako laid claim to having the island's lowest gas prices -- a distinction it often touted in advertisements. Lex Brodie's was selling regular unleaded yesterday for $1.429 -- a couple cents better previously than the next lowest competitor.
But two of the three B.C. Oil-operated Arco stations that came on line yesterday -- the Maili station and one on School Street in Kalihi -- beat Lex Brodie's price. The Kalihi Arco was charging $1.419. And Don Davis, B.C. Oil's vice president of operations, said he might lower the Kalihi price again today.
Even before the Arco stations came on line, though, Lex Brodie's earlier in the day already had lost its claim to the lowest local prices.
A Union 76 station in Niu Valley yesterday morning dropped its regular unleaded price by 5 cents a gallon -- an unusually large drop at one shot -- to $1.409. Station owner Gail Au said he lowered his price because of declines in his wholesale price last week and to thank loyal customers while besting the competition.
"We have to compete like always," Au said.
At Lex Brodie's, company president John Mayo vowed to fight back. When told by a Star-Bulletin reporter that his station no longer had Oahu's lowest price, Mayo said that would change, possibly as soon as today.
"I can't imagine us not having the lowest price," he said.
If a price war erupts, no one likely would be happier than Ted Clause, the deputy attorney general who played a key role in the state's push to have either Shell Oil Co. or Texaco Inc. sell their Oahu assets to gain approval for a national marketing and refining merger.
Clause argued that such a divestiture would not only prevent antitrust violations related to the merger but also would give a new player the opportunity to shake up Oahu's market. Clause was the target of heavy criticism for taking that position.
When told about the price posturing on Arco's first day in Hawaii, Clause said he was pleased. "We hope the traditional low-price (suppliers) in turn will compete vigorously," he said.
