Consumption of Gasoline Up in State : Arco Takes Over From Chevron as No. 1 Marketer

Fueled by a strong economic recovery, gasoline consumption in California jumped 3.51% in 1984 compared to an estimated 2% increase nationwide, according to oil industry analyst Dan Lundberg.

In another 1984 development, Los Angeles-based Atlantic Richfield Co. grabbed the largest share of the California gasoline market, toppling San Francisco-based Chevron Corp. from the No. 1 spot that it has occupied for several years, said Lundberg, president of North Hollywood-based Lundberg Survey Inc. and publisher of the Lundberg Letter, which tracks gasoline prices.

“California has engineered an extraordinary recovery in consumption of gasoline, which tends to relate to the general economic recovery,” he said.

Gasoline consumption in California had been declining or rising only fractionally since 1978, when it reached a peak of 11.819 billion gallons. In 1984, gasoline consumption rose to 11.357 billion gallons from 10.972 billion gallons in 1983.

National Peak in ’78

Nationwide, preliminary figures place total consumption for 1984 at 103.3 billion gallons, up from 101.2 billion gallons in 1983, Lundberg said. The peak in national gasoline sales, also in 1978, was 115.4 billion gallons.

The consumption of gasoline, both nationally and in California, began to rise in 1983 as the nation’s economy improved, Lundberg said. Consumption has improved despite increased automobile fuel efficiency because the number of cars driven nationwide continues to grow “and the number of miles driven has greatly increased,” he said.

Lundberg’s statistics show that during 1984, Atlantic Richfield increased its share of the California gasoline market to 16.32% from 15.11% in 1983. That improvement pushed Arco past Chevron, which has been the state’s top gasoline seller since at least 1969.

Arco “in different months in different years has hit the first position, but for a whole year this is the first time they have reached this position,” Lundberg said.

Arco 7th Across U.S.

Nationwide, Arco was seventh, with a 5.05% market share in 1984. Amoco led the nation with a 7.41% market share, followed by Shell, Exxon, Texaco, Mobil and Chevron.

Arco gained a notch during each of the last four years in California, moving from fourth position in 1981 to third in 1982 and to second in 1983.

A spokesman for Arco said the company was able to increase sales through a series of marketing strategies. Most notable was the decision in 1982 to eliminate the Arco credit card and to pass along the savings from that move to customers.

“That signaled a whole new direction for Arco,” the spokesman said.

Attractive Differential

“They compensated for the possible loss of a sizable number of Arco credit-card customers by making the price differential for a major gasoline so attractive to motorists as to rival the most aggressive of the private brand independent marketers,” Lundberg said.

The Arco spokesman said that in recent years the company has also pulled out of unprofitable regions, streamlined its marketing operations and introduced such strategies as the AM-PM markets in gas stations and the MPG Tuneup Centers. Arco now sells gasoline in 15 states.

George Wyllie, manager of marketing research for Chevron USA, said Chevron did not lose any market share in 1984 but maintained the 15.38% share of the California market that it held in 1983. In fact, because of California’s growth in consumption, Chevron actually sold more gallons of gasoline in 1984 than it did in 1983, he said.

“It’s not that we fell,” Wyllie said. “They (Arco) gained.”