$2.5 billion deal could raise local gas prices
British Petroleum To Sell Arcos To Tesoro
Last Updated: 453 days ago
Arco is known for their lower gas prices, but for San Diegans, the cheaper gas stations may not be around for much longer.
Levi Shouse is in love with his car. His '55 Cadillac Fleetwood is his pride and joy. It cost him thousands of dollars to install custom hydraulics. They weigh 6,000 pounds and have a tendency to make gas disappear.
"It's very, very expensive," said Schouse. "I wouldn't recommend it to anyone. In this economy, I'm trying to do everything I can to save money on fuel because that's my biggest expense right now. Arco is usually cheaper."
However, Arco may not be cheaper for much longer. Last Monday, British Petroleum announced it will sell its Arcos in California, Arizona and Nevada along with a refinery in Carson, Calif. to Texas-based Tesoro. The $2.5 billion deal is expected to go through next year.
Tesoro released a statement to 10News, which read in part, "Tesoro is committed to maintaining and potentially expanding the well-established ARCO-branded retail model. We expect the approximate 800 branded dealer stations in Southern California, Arizona and Nevada will continue establishing their own fuel prices."
Economists say the future is still unclear.
"It's unlikely it'll reduce gas prices in San Diego," said Dan Siever, an economics professor at San Diego State University. "It's more likely it'll make them a little higher."
Siever said Tesoro and Chevron together will control more than half of the gas market in California. He said the change in price will most likely be gradual, but this amount of control has activists upset.
"We expect and are going to demand that the Federal Trade Commission look into this," said Charles Langley, the senior gas analyst for the Utility Consumer Action Network.
Langley said Arco stations can save San Diegans from 10 to 25 cents a gallon.
However, it is too soon to say whether or not these savings will stick around.
"If there's no competition, it's easier to raise prices," said Siever. "For people on a tight budget, 10 cents can make a real difference."
The savings would make a difference for people like Shouse. He said his car is for sale now, and if prices get any higher, he will be forced to let his dream car go.
"When I bought this car, I bought it for the rest of my life," he said. "It's very sad, but you have to adjust and move on."
Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.