Fueling Alaska: there aren't a lot of new customers, so those in the retail and wholesale fuel business have to provide quality service at competitive prices.

• Author: Jones, Patricia
• Position: Industry Overview

Despite a growing number of vehicles on the nation's roads, few, if any, full-service gas stations remain. Remember those corner service stations from years ago? A friendly smile and oil check accompanied the gas-pumping and cash-collecting service provided by the mom and pop-owned and -operated business.

Now, drivers have many more choices of locations, as gas stations crowd busy corners and sprout up seemingly overnight in the parking lots of large retail chain stores such as Fred Meyer, Wal-Mart and Safeway. Few gas stations remain truly independently owned, as bulk purchasing power puts additional pressure on locally owned operations.

"We supply gas to Safeway, and we see that increasing volumes are going to those stores, those high volume retailers," said Ron Noel, vice president of Tesoro Alaska, which, in addition to operating a refinery at Nikiski, oversees 33 company-owned or independently owned gas retail stores throughout Alaska. "It's having a competitive effect on the rest of the market."

That trend of fuel sales shifting toward new high-volume stations has certainly been noticed by Alaska-owned retailers.

A SMALLER PIECE OF THE PIE

"We've seen that the retail margins have shrunk over the last couple years," said Jim Boltz, chief operating officer of Petro Star, which owns nine retail gas stations in the Fairbanks area and one each in Kodiak and Dutch Harbor. "You just have to be very, very competitive and run a better operation. It makes for a much more difficult market for us to sustain."

In addition to its retail fuel stations, Petro Star operates wholesale fuel sales under its subsidiaries, Sourdough Fuel in the Interior and North Pacific Fuel in Valdez, Kodiak and Dutch Harbor.

And finally, Petro Star, which is owned by the Arctic Slope Regional Corp., refines North Slope crude in two locations-North Pole and Valdez.

"That's not necessarily an advantage over other distributors," Boltz said. "We distribute fuels just about statewide ... from the Interior throughout."

Williams Alaska Petroleum, Alaska's other large refiner of petroleum-based retail products, is also noticing an impact in the retail market.

"Safeway and the other big box stores... depending on the location of our store, we see a little bit of an impact," said Jeff Cook, vice president of external affairs at Williams Alaska Petroleum. "For the consumers, stores are getting better; we have the added convenience of credit card readers on all the pumps and...