Gas dealers
go under

3 Chevron stations lose leases
and close the pumps

By Tim Ruel

After being a Chevron gasoline dealer since 1947, Ken Toguchi packed it up New Year's Eve and shut down his station, Ken T Service on Dillingham Boulevard in Kalihi.

Toguchi, 69, said he was not ready for retirement, but the dealer had little choice. He, as well as two other Chevron dealers on Oahu, recently lost his lease with Chevron.

Football coach June Jones, a friend of Toguchi's for decades, was among those who went to the Kalihi station Tuesday to watch his friend close shop. "It's a sad thing," said Jones. Dealers are a dying breed of businessman, who are part of the community, Jones said.

Also out of business is Dick's Monsarrat Service near Diamond Head, which closed shop the week before Christmas. Richard Loui had run the station since 1971, his son said. Also closed is Lance Goya's Chevron, which went out of business Sept. 30 at the corner of Liliha and School streets, Goya said.

There are common threads that likely led to each dealer's demise. The land under all three gas stations is leased to Chevron by individual owners. Chevron prefers to own the land under its dealerships, Goya said, noting that his dealer lease expired at the same time that Chevron's ground lease expired.

Also, each dealership was doing well in the repair business, but was selling relatively low volumes of gas, less than 100,000 gallons a month. Toguchi said he used to sell nearly 100,000 gallons five years ago, but lately, his station been selling about 60,000 gallons a month. "In reality you gotta sell gas," he said.

Chevron announced in the 1990s that it no longer wants to work with dealers who have automotive service bays at their stations, Goya said. The oil company wants to focus on the most profitable aspect of the business: selling gasoline, Goya said.

"It was told to all of us dealers that that's their vision, and I guess that's just one of those things," Goya said.

From 1988 to 1995, Chevron pulled 22 percent of its national refinery profits from Hawaii, $101.2 million, according to an economic report. At the same time, Hawaii represented 3.1 percent of Chevron's sales volume. The report was based on information provided by Chevron during the state's antitrust lawsuit against the oil companies. Chevron operates one of the two refineries in the state.

Goya also blamed his closure in part on the 2002 passage of a state law that would regulate wholesale and retail gas prices in Hawaii. "(The oil companies) don't want to spend money in a state that's not a good business climate for them," Goya said. His former station was more than 40 years old and was facing electrical repairs, he said.

But, well before the price-cap law came into existence, there have been other factors that have pushed dealers out of their leases, Goya said. In recent years, dozens of Hawaii dealers have gone out of business, said former Chevron dealer Frank Young, president of the Hawaii Automotive Repair and Gasoline Dealers Association.

At the same time, gas stations that are operated by the oil companies are growing in number.

"They're just fulfilling their master plan and the gas price cap seems to be a convenient excuse at this time," said Young, a Chevron critic.

A Chevron spokesman could not be reached for comment Tuesday.

Toguchi said he is moving his repair business to a new company, Oscar's Service, that is scheduled to open today near his former station in Kalihi.

Goya has already reopened his repair shop, Lance Goya's Auto Repair, at another location.

Goya, 38, said he had worked at the Chevron station for 21 years and owned it as a dealer for four years before he closed. Chevron was good to him, he said, giving him a relatively cheap rent. It was sad and unfortunate to lose the business, but Goya saw it coming, he said.

"I knew the station wasn't going to be there for a long time," Goya said.

Kevin Loui, the 43-year-old son of former Monsarrat dealer Richard Loui, said he is hoping to open a repair shop in the back of the family's old station near Diamond Head. The Loui family learned in the summer that they were losing their lease. They decided to go out quietly before Christmas, without a major discount gasoline sale.

"We just pumped the gas until we pretty much ran out," Kevin Loui said.


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