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Next Year Is Now

March 20, 1988

Ever since 1982, when Atlantic Richfield did away with credit cards and lowered gasoline prices, a small number of competitors have been saying: "Wait till next year." What was supposed to happen next year? That's when Arco, having eliminated competition, would raise prices and gouge the motoring public.

For six years, we at Arco have been hearing this absurd claim, and for six years the complainers have been forced to eat their words. Yet even though "next year" has never come, the claim continues to draw headlines and columns of type--most recently in a March 11, front-page Times story ("Arco's Low Prices Buy Problems").

The simple facts are these:

(1) Arco is committed to offering top-quality gasoline at low, no-frills prices. Arco is proud to be the consumer's friend and will remain so.

(2) The gasoline marketplace is fiercely competitive, especially in California, where Arco, Chevron, Shell, Unocal, Mobil, Texaco and Exxon have strong positions. Even as the No. 1 gasoline retailer in the state, Arco enjoys only an 18% share of the market. In such a tough environment, no single company can unilaterally drive up prices, even if it wants to.

Comparing Arco to Goliath and the independent dealer to David may make fun reading, but it ignores reality.

Arco has no desire or intention to drive independent dealers out of business, but, just as Arco has changed with the times, so must these dealers if they are to stay competitive. As much as I emphasized this aspect of the story during my interview with The Times, it was largely ignored in the article, which focused instead on the "wait till next year" mythology. Take my word for it: Next year Arco will still be the consumer's friend.

GEORGE H. BABIKIAN

Los Angeles

The writer is president of Arco Petroleum Products.

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