In an agreement announced April 16, Bristol Alliance Fuels will operate Delta Western's fuel terminals and tank farms in Bristol Bay. A BAF official doesn't expect the new arrangement to directly impact fuel prices.
Bristol Alliance Fuels will lease and operate Delta Western’s fuel terminals and tank farms in Dillingham and Naknek under a recent deal announced on April 16. Delta Western will provide fuel to BAF, and most of its employees transferred to BAF as well.
The two companies have been working on the agreement for about a year. The state attorney general’s office considered the proposal and approved it in late March.
A central question is whether the agreement will affect fuel prices. BAF President and CEO Bob Cox doesn't expect any major price fluctuations – at least, not as a direct result of the new arrangement. Crude oil prices have seen an uptick since December, and Cox said that increase could cause gas prices around the region to rise.
“We’re going to do our best to control pricing and be as efficient with our expenses as we possibly can and maintain the lowest-price fuel as is reasonably possible,” he said. "But we do have to, of course, follow the cost of the fuel as it is in the world market."
This arrangement also narrows the choice of fuel providers in Dillingham to two companies; Vitus Energy is now the only other provider in town. But Cox stressed that as a subsidiary of the Bristol Bay Native Corporation, BAF's mission to support communities in the region extends “beyond competition.”
“We are not only competitive but we are actually driven, because of our mission, to keep energy prices low within the BBNC region,” he said.
This is the first time that BAF will operate in Naknek, adding some 300 clients to BAF’s customer base. Cox was unable to disclose the specific finances of the agreement. But he was able to provide some perspective.
“Delta Western’s Naknek terminal does more business than we do –Bristol Alliance Fuels does – in Dillingham," he said. "So fair to say that in terms of the volume of fuel sales for Bristol Alliance Fuels, it will be more than double after this transition than it was in the past.”
BAF is in the process of transferring the credit card machines from Delta Western to BAF accounts. Cox anticipates that all fuel terminals will reopen by April 19. Delta Western customers in Dillingham can receive service at Bristol Express.