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Wednesday, June 28, 2000

By Ken Sakamoto, Star-Bulletin
Costco's 16-pump gas station under construction in
Waipio Gentry could open as early as Friday and
offer the lowest prices on Oahu.

New Costco in
Waipio may ignite
gas-price war

By Tim Ruel


Costco's massive, 16-pump gas station is about to open ahead of schedule in Waipio Gentry -- promising to bring the big-box retailer's discount strategy to West Oahu drivers as early as Friday.

Nearby competitors have not slashed their prices in anticipation, but say they will be watching.

The four-lane station stands nearly complete on Ka Uka Boulevard, next door to Costco's newest local warehouse, which is scheduled to open July 20. The station, Costco's first in Hawaii, will become the state's largest civilian gasoline outlet, but for Costco members only. And it could start a gas-price war.

Issaquah, Wash.-based Costco Wholesale Corp.'s mainland gas stations typically undercut the competition by 5 cents to 20 cents a gallon, said Joel Benoliel, a senior vice president.

"We are going to be very competitive," Benoliel said, though he noted Costco would not know actual resale prices until the company buys the gas from a local wholesaler.

George Williamson, general manager of a company that runs the nearby Shell station, said prices have not changed in Waipio because the stations are taking a wait-and-see attitude.

Should consumers flock to Costco, Williamson expects dealers will then act. "I think everybody will respond; it's just a matter of how they respond."

Lower gas prices would definitely lead consumers to switch stations to save a few cents a gallon, Williamson said.

Customers will "do anything for 2 cents," he said. "That's the way this market goes. It has never changed. It probably never will."

Less than a mile away from Costco, regular unleaded at Tesoro, Aloha and Shell stations on Ka Uka Boulevard ran from $1.74 to $1.76 a gallon as of yesterday.

That's about the same as stations in neighboring Mililani, and a penny or two cheaper than some downtown Honolulu stations.

Gas prices on Oahu have risen -- some more than 35 cents a gallon -- since November, when Costco announced it would open the station. The increases have been mirrored on the mainland where some cities have hit $2.25 a gallon.

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