<PAGE>
                       FORM 10-Q

           SECURITIES AND EXCHANGE COMMISSION
                 WASHINGTON, D.C. 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended March 31, 1998

                           OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934.

     For the transition period from _______ to _______.  

               Commission File Number: 1-10398

                   GIANT INDUSTRIES, INC.
     (Exact name of registrant as specified in its charter)


            Delaware                           86-0642718
(State or other jurisdiction of            (I.R.S. Employer
 incorporation or organization)            Identification No.)


     23733 North Scottsdale Road, Scottsdale, Arizona 85255
     (Address of principal executive offices)       (Zip Code)


     Registrant's telephone number, including area code:
                     (602) 585-8888

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                   Yes [X]    No [ ]

Number of Common Shares outstanding at April 30, 1998: 10,993,267 shares.
<PAGE>
<PAGE>
             GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                             INDEX


PART I  - FINANCIAL INFORMATION

Item 1  - Financial Statements

          Condensed Consolidated Balance Sheets
          March 31, 1998 (Unaudited) and December 31, 1997

          Condensed Consolidated Statements of Earnings (Loss)
          Three Months Ended March 31, 1998 and 1997
          (Unaudited) 

          Condensed Consolidated Statements of Cash Flows
          Three Months Ended March 31, 1998 and 1997 (Unaudited) 

          Notes to Condensed Consolidated Financial Statements
          (Unaudited) 

Item 2  - Management's Discussion and Analysis of
          Financial Condition and Results of Operations

PART II - OTHER INFORMATION

Item 1  - Legal Proceedings

Item 4  - Submission of Matters to a Vote of Security Holders

Item 6  - Exhibits and Reports on Form 8-K 

SIGNATURE<PAGE>
<PAGE>
                                 PART I
                         FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

<TABLE>
                                   GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                               (In thousands)

<CAPTION>
                                                                        March 31, 1998   December 31, 1997
                                                                        --------------   -----------------
                                                                         (Unaudited)
<S>                                                                         <C>             <C>
ASSETS

Current assets:
  Cash and cash equivalents                                                 $  44,734       $  82,592
  Accounts receivable, net                                                     48,433          57,070
  Inventories                                                                  67,447          57,598
  Prepaid expenses and other                                                    9,584           7,016
  Deferred income taxes                                                         2,800           2,800
                                                                            ---------       ---------
     Total current assets                                                     172,998         207,076
                                                                            ---------       ---------
Property, plant and equipment                                                 424,258         402,600
  Less accumulated depreciation and amortization                             (126,422)       (120,773)
                                                                            ---------       ---------
                                                                              297,836         281,827
                                                                            ---------       ---------
Goodwill                                                                       18,156          18,363
Other assets                                                                   27,127          28,105
                                                                            ---------       ---------
                                                                            $ 516,117       $ 535,371
                                                                            =========       =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt                                         $   1,443       $     562
  Accounts payable                                                             45,976          55,546
  Accrued expenses                                                             36,248          39,243
                                                                            ---------       ---------
     Total current liabilities                                                 83,667          95,351
                                                                            ---------       ---------
Long-term debt, net of current portion                                        271,033         275,557
Deferred income taxes                                                          25,687          25,887
Other liabilities                                                               4,494           5,109
Commitments and contingencies (Notes 4 and 5)                 
Common stockholders' equity                                                   131,236         133,467
                                                                            ---------       ---------
                                                                            $ 516,117       $ 535,371
                                                                            =========       =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.<PAGE>
<PAGE>
<TABLE>
                            GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
                                          (Unaudited)
                             (In thousands except per share data)

<CAPTION>
                                                                   Three Months Ended
                                                                        March 31,
                                                             ------------------------------
                                                                1998               1997
                                                             -----------        -----------
<S>                                                          <C>                <C>
Net revenues                                                 $   145,716        $   116,138
Cost of products sold                                            105,752             86,588
                                                             -----------        -----------
Gross margin                                                      39,964             29,550
Operating expenses                                                24,893             15,822
Depreciation and amortization                                      6,789              5,005
Selling, general and administrative expenses                       5,815              4,448
                                                             -----------        -----------
Operating income                                                   2,467              4,275
Interest expense, net                                              5,599              2,468
                                                             -----------        -----------
Earnings (loss) before income taxes                               (3,132)             1,807
Provision (benefit) for income taxes                              (1,450)               683
                                                             -----------        -----------
Net earnings (loss)                                          $    (1,682)       $     1,124 
                                                             ===========        ===========
Net earnings (loss) per common share:
  Basic                                                      $     (0.15)       $      0.10 
                                                             ===========        ===========
  Assuming dilution                                          $     (0.15)       $      0.10 
                                                             ===========        ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.<PAGE>
<PAGE>
<TABLE>
                     GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                  (In thousands)
<CAPTION>
                                                                         Three Months Ended
                                                                              March 31,
                                                                        --------------------
                                                                          1998        1997
                                                                        --------    --------
<S>                                                                     <C>         <C>
Cash flows from operating activities:
  Net earnings (loss)                                                   $ (1,682)   $  1,124
  Adjustments to reconcile net earnings (loss) to net cash used
    by operating activities:
      Depreciation and amortization                                        6,789       5,005
      Deferred income taxes                                                 (200)         91
      Other                                                                   42         169
      Changes in operating assets and liabilities:
        Decrease in receivables                                            8,665         810
        Increase in inventories                                           (9,849)     (7,188)
        (Increase) decrease in prepaid expenses and other                 (2,568)        861
        Decrease in accounts payable                                      (9,570)     (2,981)
        (Decrease) increase in accrued expenses                           (2,995)        739
                                                                        --------    --------
Net cash used by operating activities                                    (11,368)     (1,370)
                                                                        --------    --------
Cash flows from investing activities:
  Purchases of property, plant and equipment and other assets            (12,658)     (5,886)
  Business acquisition                                                    (9,761)
  Refinery acquisition contingent payment                                             (6,910)
  Proceeds from sale of property, plant and equipment                        186          62
                                                                        --------    --------
Net cash used by investing activities                                    (22,233)    (12,734)
                                                                        --------    --------
Cash flows from financing activities: 
  Proceeds of long-term debt                                                          17,000
  Payments of long-term debt                                              (3,643)    (11,085)
  Payment of dividends                                                      (550)       (558)
  Deferred financing costs                                                   (64)
                                                                        --------    --------
Net cash (used) provided by financing activities                          (4,257)      5,357
                                                                        --------    --------
Net decrease in cash and cash equivalents                                (37,858)     (8,747)
Cash and cash equivalents: 
  Beginning of period                                                     82,592      12,628
                                                                        --------    --------
  End of period                                                         $ 44,734    $  3,881
                                                                        ========    ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.<PAGE>
<PAGE>
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

NOTE 1 - BASIS OF PRESENTATION:

     The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and notes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments and
reclassifications considered necessary for a fair and comparable
presentation have been included and are of a normal recurring nature.
Operating results for the three months ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1998. The enclosed financial statements should be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.

     In March 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share", which is effective for financial statements for
both interim and annual periods ending after December 15, 1997. The
Company has implemented this Statement and, as required, has restated
earnings per share ("EPS") for all periods presented. This new standard
requires dual presentation of "basic" and "diluted" EPS on the face of
the earnings statement and requires a reconciliation of the numerator
and denominator of the basic and diluted EPS calculations. (See Note 2.)
Basic earnings per common share is computed on the weighted average
number of shares of common stock outstanding during each period.
Earnings per common share assuming dilution is computed on the weighted
average number of shares of common stock outstanding plus additional
shares representing the exercise of outstanding common stock options
using the treasury stock method.

     In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive
Income", which is effective for fiscal 1998 financial statements for
both interim and annual periods. SFAS No. 130 requires that an
enterprise (a) classify items of other comprehensive income by their
nature in a financial statement and (b) display the accumulated balance
of other comprehensive income separately from retained earnings and
additional capital in the equity section of a statement of financial
position. The Company has no items of other comprehensive income for the
periods presented in these financial statements. 

     In June 1997, the FASB also issued SFAS No. 131 "Disclosures About
Segments of an Enterprise and Related Information", which is effective
for fiscal 1998. This statement need not be applied to fiscal 1998
interim financial statements. SFAS No. 131 establishes standards for the
way that public enterprises report information about operating segments
in annual financial statements and requires that those enterprises
report selected information about operating segments in interim
financial reports issued to stockholders. It also establishes standards
for disclosures about products and services, geographic areas and major
customers. The Company has not completed evaluating the effects this
Statement will have on its financial reporting and disclosures. The
Statement will have no effect on the Company's financial position or
results of operations.

<PAGE>
<PAGE>
NOTE 2 - EARNINGS PER SHARE:

     As discussed in Note 1, the following is a reconciliation of
the numerators and denominators of the basic and diluted per share
computations for net earnings (loss) as required by SFAS No. 128:

<TABLE>
<CAPTION>
                                                Three Months Ended March 31, 
                             -------------------------------------------------------------------
                                           1998                               1997
                             --------------------------------   --------------------------------
                                                        Per                                Per
                                Loss         Shares    Share      Income        Shares    Share
                             (Numerator) (Denominator) Amount   (Numerator) (Denominator) Amount
                             ----------- ------------- ------   ----------- ------------- ------
<S>                          <C>          <C>          <C>      <C>          <C>          <C>
Earnings (loss) per common 
  share - basic

  Net earnings (loss)        $(1,682,000) 10,993,267   $(0.15)  $1,124,000   11,097,867   $0.10

  Effect of dilutive
    stock options                                  -*                           111,612
                             -----------  ----------   ------   ----------   ----------   -----
Earnings (loss) per common 
  share - assuming dilution

  Net earnings (loss)        $(1,682,000) 10,993,267   $(0.15)  $1,124,000   11,209,479   $0.10
                             ===========  ==========   ======   ==========   ==========   =====
</TABLE>

*The additional shares would be antidilutive due to the net
 loss.

     There were no transactions subsequent to March 31, 1998,
that if the transactions had occurred before March 31, 1998,
would materially change the number of common shares or potential
common shares outstanding as of March 31, 1998.


<PAGE>
<PAGE>
NOTE 3 - INVENTORIES:

<TABLE>
<CAPTION>
                                          March 31, 1998     December 31, 1997
                                          --------------     -----------------
                                                    (In thousands)
<S>                                           <C>                  <C>
Inventories consist of the following:

First-in, first-out ("FIFO") method:
  Crude oil                                   $13,903              $12,736
  Refined products                             29,959               25,562
  Refinery and shop supplies                    8,212                7,530
  Merchandise                                   4,655                4,640
Retail method:
  Merchandise                                   5,695                5,840
                                              -------              -------
                                               62,424               56,308
Allowance for last-in, first-out
  ("LIFO") method                               8,926                4,220
Allowance for lower of cost or market          (3,903)              (2,930)
                                              -------              -------
                                              $67,447              $57,598
                                              =======              =======
</TABLE>

                                        <PAGE>
<PAGE>
NOTE 4 - LONG-TERM DEBT:

     In August 1997, the Company issued $150,000,000 of 9% senior
subordinated notes due 2007 (the "9% Notes")and in November 1993 the
Company issued $100,000,000 of 9 3/4% senior subordinated notes due
2003 (the "9 3/4% Notes", and collectively with the 9% Notes, the
"Notes"). The Indentures supporting the Notes contain covenants that,
among other things, restrict the ability of the Company and its
subsidiaries to create liens, incur or guarantee debt, pay dividends,
sell certain assets or subsidiary stock, engage in certain mergers,
engage in certain transactions with affiliates or alter the Company's
current line of business. In addition, subject to certain conditions,
the Company is obligated to offer to purchase a portion of the Notes at
a price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase, with the net cash
proceeds of certain sales or other dispositions of assets. Upon a
change of control, which would include the proposed merger with Holly
Corporation as described in Note 6, the Company will be required to
offer to purchase all of the Notes at 101% of the principal amount
thereof, plus accrued interest, if any, to the date of purchase.

     Repayment of the Notes is jointly and severally guaranteed on an
unconditional basis by the Company's direct and indirect wholly-owned
subsidiaries, subject to a limitation designed to ensure that such
guarantees do not constitute a fraudulent conveyance. Except as
otherwise allowed in the Indenture pursuant to which the Notes were
issued, there are no restrictions on the ability of such subsidiaries
to transfer funds to the Company in the form of cash dividends, loans
or advances. General provisions of applicable state law, however, may
limit the ability of any subsidiary to pay dividends or make
distributions to the Company in certain circumstances.

     Separate financial statements of the subsidiaries are not included
herein because the subsidiaries are jointly and severally liable; the
aggregate assets, liabilities, earnings and equity of the subsidiaries
are substantially equivalent to the assets, liabilities, earnings and
equity of the Company on a consolidated basis; and the separate
financial statements and other disclosures concerning the subsidiaries
are not deemed material to investors.
<PAGE>
<PAGE>
NOTE 5 - COMMITMENTS AND CONTINGENCIES:

     The Company and certain subsidiaries are defendants to various
legal actions. Certain of these pending legal actions involve or may
involve claims for compensatory, punitive or other damages. Litigation
is subject to many uncertainties and it is possible that some of these
legal actions, proceedings or claims could be decided adversely. 
Although the amount of liability at March 31, 1998 with respect to 
these matters is not ascertainable, the Company believes that any 
resulting liability should not materially affect the Company's
financial condition or results of operations.

     Federal, state and local laws and regulations relating to health
and the environment affect nearly all of the operations of the
Company. As is the case with all companies engaged in similar
industries, the Company faces significant exposure from actual or
potential claims and lawsuits involving environmental matters. These
matters include soil and water contamination, air pollution and
personal injuries or property damage allegedly caused by substances
manufactured, handled, used, released or disposed of by the Company. 
Future expenditures related to health and environmental matters
cannot be reasonably quantified in many circumstances due to the
speculative nature of remediation and clean-up cost estimates and
methods, imprecise and conflicting data regarding the hazardous
nature of various types of substances, the number of other
potentially responsible parties involved, various defenses which may
be available to the Company and changing environmental laws and
interpretations of environmental laws.

     The United States Environmental Protection Agency notified the
Company in May 1991 that it may be a potentially responsible party
for the release or threatened release of hazardous substances,
pollutants, or contaminants at the Lee Acres Landfill (the "Landfill"),
which is owned by the United States Bureau of Land Management (the 
"BLM") and which is adjacent to the Company's Farmington refinery. 
This refinery was operated until 1982. Although a final plan of action
for the Landfill has not yet been adopted by the BLM, the BLM has 
developed a proposed plan of action, which it projects will cost 
approximately $3,900,000 to implement. This cost projection is based 
on certain assumptions which may or may not prove to be correct, and 
is contingent on confirmation that the remedial actions, once 
implemented, are adequately addressing Landfill contamination. For 
example, if assumptions regarding groundwater mobility and 
contamination levels are incorrect, the BLM is proposing to take 
additional remedial actions with an estimated cost of approximately 
$1,800,000. Potentially responsible party liability is joint and 
several, such that a responsible party may be liable for all of the 
clean-up costs at a site even though it was responsible for only a 
small part of such costs. Based on current information, the Company
does not believe it needs to record a liability in relation to the
BLM's proposed plan.

     The Company has established an environmental liability accrual of
approximately $2,800,000. Approximately $800,000 relates to ongoing
environmental projects, including the remediation of a hydrocarbon
plume at the Company's Farmington refinery and hydrocarbon
contamination on and adjacent to 5.5 acres the Company owns in
Bloomfield, New Mexico. The remaining amount of approximately
$2,000,000 relates to an original estimate of approximately
$2,300,000, recorded in the second quarter of 1996, of certain
environmental obligations assumed in the acquisition of the Bloomfield
refinery. The environmental accrual is recorded in the current and
long-term sections of the Company's Consolidated Balance Sheet.

     The Company has received several tax notifications and
assessments from the Navajo Tribe relating to crude oil and natural
gas removed from properties located outside the boundaries of the
Navajo Indian Reservation in an area of disputed jurisdiction,
including a $1,800,000 severance tax assessment issued in November
1991. The Company has invoked its appeal rights with the Tribe's Tax
Commission in connection with this assessment and intends to oppose
the assessment. It is the Company's position that it is in substantial
compliance with laws applicable to the disputed area and, therefore,
the Company has accrued a liability in regards thereto for
substantially less than the amount of the original assessment. It is
possible that the Company's assessments will have to be litigated by
the Company before final resolution. In addition, the Company may
receive further tax assessments.<PAGE>
<PAGE>
NOTE 6 - ACQUISITIONS AND MERGER:

     On February 10, 1998, the Company completed the purchase of the
assets of DeGuelle Oil Company and the stock of DeGuelle Enterprises
(collectively "DeGuelle") for $9.75 million. DeGuelle is a Durango,
Colorado-based petroleum marketing company. Included in the purchase
were seven service station/convenience stores, two cardlock commercial
fleet fueling facilities, a gasoline and diesel storage bulk plant and
related transportation equipment. All of the facilities are located in
southwestern Colorado and will be supplied by the Company's
refineries. In 1997, DeGuelle had sales of approximately 10.0 million
gallons of gasoline and diesel fuel in addition to 35,000 gallons of
lubricants.

     The Company has entered into agreements to acquire thirty-three
service station/convenience stores from Kaibab Industries, Inc.  The
retail units, located throughout Arizona, include fifteen in the
greater Phoenix area and eleven in the Tucson market, with the balance
located primarily in southern and eastern Arizona. Other assets in the
acquisition include fuel truck/transports, other related equipment,
fuel inventories and some undeveloped real estate. These units have
had sales of approximately 70.0 million gallons of refined petroleum
products per year. The acquisition is expected to close in the second
quarter of 1998 subject to normal pre-closing conditions, due
diligence procedures and regulatory approvals.

     On April 15, 1998, the Company announced that it had entered into
an Agreement and Plan of Merger (the "Merger Agreement") with Holly
Corporation ("Holly"). Pursuant to the Merger Agreement, among other
things:

     (i)  Holly will be merged with and into Giant.

     (ii) Based upon the number of shares of Giant Common Stock and
Holly Common Stock and the number of Holly stock options and Holly
phantom stock rights outstanding as of April 30, 1998, each
outstanding share of Holly Common Stock would be converted into the
right to receive approximately 1.33 shares of Giant Common Stock plus
$2.886 in cash.

     Holly, listed on the American Stock Exchange, is an independent
refiner of petroleum and petroleum derivatives and produces high-value
light products such as gasoline, diesel fuel and jet fuel that are
sold primarily in the southwestern United States, northern Mexico and
Montana. Principal gasoline customers include other refineries,
convenience store chains, independent marketers, an affiliate of the
Mexican energy company PEMEX and retailers. Its diesel fuel is sold to
end users, wholesalers, and independent dealers. Jet fuel is sold
primarily to the military. Subsidiaries of Holly operate refineries in
New Mexico and Montana and own, lease, and operate 950 miles of
refined product pipelines, 625 miles of crude oil gathering pipelines,
seven product terminals, and an asphalt marketing business. 
     
     The merger has received the approval of both companies' Board of
Directors. Completion of the transaction is scheduled for the
beginning of the third quarter of 1998, subject to receiving necessary
government approvals and approvals of the stockholders of both
companies.<PAGE>
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

EARNINGS (LOSS) BEFORE INCOME TAXES
-----------------------------------
     For the three months ended March 31, 1998, the Company incurred a
loss before income taxes of $3.1 million, a decrease of approximately
$4.9 million from earnings before income taxes of $1.8 million for the
three months ended March 31, 1997. The decrease is primarily due to
(i) an 18% decline in refinery margins, partially related to a non-
cash charge for a reduction in the carrying value of inventories of
approximately $1.0 million; (ii) increased interest costs related to
(a) the issuance of $150.0 million of senior subordinated notes in
August 1997 to finance the acquisition of various service
station/convenience stores and related assets (the "Thriftway Assets"
and "DeGuelle Assets") and Phoenix Fuel Co., Inc. ("Phoenix Fuel"),
collectively (the "Acquisitions"), and (b) capital lease obligations
recorded in connection with the Thriftway Assets; and (iii) increased
operating and administrative expenses primarily related to the
Acquisitions. These increases in costs were offset in part by profit
contributions from the Acquisitions and a 5% increase in volumes and a
21% increase in margins realized from finished product sold by the
Company's retail operations, excluding the Thriftway and DeGuelle
Assets.

REVENUES
--------
     Revenues for the three months ended March 31, 1998, increased
approximately $29.6 million or 25% to $145.7 million from $116.1
million in the comparable 1997 period. The increase is primarily due
to the Acquisitions, offset in part by a 27% decline in refinery
weighted average selling prices and a 2% decline in refinery sourced
finished product sales volumes.

     The volumes of refined products sold through the Company's retail
units increased approximately 64% from 1997 levels primarily due to
the Thriftway and DeGuelle Assets, along with a 5% increase in the
volumes of finished product sold from the Company's other retail
operations. This primarily reflects a 38% increase in the volume of
finished product sold from the Company's travel center, due in large
part to improved marketing programs put in place during 1997.

COST OF PRODUCTS SOLD
---------------------
     For the three months ended March 31, 1998, cost of products sold
increased $19.2 million or 22% to $105.8 million from $86.6 million in
the corresponding 1997 period. The increase is primarily due to the
Acquisitions, offset in part by a 30% decline in average crude oil
costs. In addition, 1998 cost of products sold increased as a result
of a reduction in the carrying value of inventories related to the
decline in crude oil and refined product prices.

OPERATING EXPENSES
------------------
     For the three months ended March 31, 1998, operating expenses
increased approximately $9.1 million or 57% to $24.9 million from
$15.8 million for the three months ended March 31, 1997.

     Approximately 87% of the increase is due to the Acquisitions. For
the other operations, 1998 costs increased because of repair and
maintenance projects at the Ciniza refinery, increased payroll and
related costs and higher retail advertising expenses and operating
bonuses. These increases were offset in part by a reduction in general
insurance expenses. Increased payroll and related costs relate
primarily to general wage increases and expanded retail operations.

DEPRECIATION AND AMORTIZATION 
-----------------------------
     For the three months ended March 31, 1998, depreciation and
amortization increased approximately $1.8 million or 36% to $6.8
million from $5.0 million in the same 1997 period.

     Approximately 72% of the increase is due to the Acquisitions. The
remaining increases are primarily related to construction, remodeling
and upgrades in retail, refining and transportation operations and the
amortization of 1997 refinery turnaround costs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
--------------------------------------------
     For the three months ended March 31, 1998, selling, general and
administrative expenses ("SG&A") increased approximately $1.4 million
or 31% to $5.8 million from $4.4 million in the corresponding 1997
period.

     Approximately 39% of the increase is due to SG&A associated with
the operations of Phoenix Fuel. The remaining increases are primarily
the result of higher payroll and related costs and outside services,
mostly due to the Acquisitions and planning for future growth.

INTEREST EXPENSE, NET
---------------------
     For the three months ended March 31, 1998, net interest expense
(interest expense less interest income) increased approximately $3.1
million or 127% to $5.6 million from $2.5 million in the comparable
1997 period.

     The increase is primarily due to additional long-term debt
related to the Acquisitions, including the issuance of $150.0 million
of senior subordinated notes in August 1997 and capital lease
obligations recorded in connection with the purchase of the Thriftway
Assets at the end of May 1997. This increase was partially offset by
an increase in interest and investment income due to an increase in
excess funds available for investment resulting from the issuance of
the senior subordinated notes. The effects of fluctuations in interest
rates applicable to invested funds were nominal.
      
INCOME TAXES
------------
     The income tax benefit for the three months ended March 31, 1998
and the provision for income taxes for the three months ended March
31, 1997 were computed in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, resulting in an effective rate
of approximately 46% for the 1998 three month period and 38% for the
comparable 1997 period. The difference in the two rates is primarily
due to deferred tax adjustments.


LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW FROM OPERATIONS
-------------------------
     Operating cash flows declined in the first quarter of 1998 in
relation to the comparable 1997 period, primarily as a result of the
differences in the net changes in working capital items in each
period, as well as a net loss in the 1998 period. Net cash used by
operating activities totaled $11.4 million for the three months ended
March 31, 1998, compared to $1.4 million in the comparable 1997
period. 

WORKING CAPITAL
---------------
     Working capital at March 31, 1998 consisted of current assets of
$173.0 million and current liabilities of $83.7 million, or a current
ratio of 2.07:1. At December 31, 1997, the current ratio was 2.17:1
with current assets of $207.1 million and current liabilities of $95.4
million.

     Current assets have decreased since December 31, 1997, primarily
due to a decrease in cash and cash equivalents and accounts
receivable, offset in part by an increase in inventories and prepaid
items. Accounts receivable have decreased primarily due to a decline
in finished product selling prices, as well as a decrease in product
volumes represented in the outstanding balances. Inventories have
increased due to an increase in pipeline crude oil volumes, as well as
terminal and refinery onsite refined product volumes. These increases
are offset in part by a decline in crude oil and refined product
prices. The volume increases are partially related to the building of
inventories in anticipation of a scheduled major maintenance
turnaround at the Ciniza refinery that started in mid-April and is
scheduled to be completed in mid-May. Prepaid expenses increased
primarily as a result of margin deposits related to the purchase of
crude oil and heating oil futures contracts in connection with the
Company's hedging of long-term fixed price sales contracts. Current
liabilities have declined due to a decrease in accounts payable and
accrued expenses. Accounts payable have decreased primarily as a
result of a decline in the cost of raw materials. Accrued expenses
have decreased primarily as a result of the payment of accrued
interest costs, management incentive and other bonuses and ESOP and
401(k) contributions. 

CAPITAL EXPENDITURES AND RESOURCES
----------------------------------
     Net cash used in investing activities for the purchase of
property, plant and equipment and other assets, excluding business
acquisitions, totaled approximately $12.7 million for the first
quarter of 1998. Expenditures included amounts for refinery and
transportation equipment and facility upgrades, capacity enhancement
projects for the refineries, expenditures in anticipation of the
Ciniza refinery second quarter turnaround, construction costs for two
new retail units, acquisition of land for future retail units and
continuing retail equipment and system upgrades.

     On February 10, 1998, the Company completed the purchase of the
assets of DeGuelle Oil Company and the stock of DeGuelle Enterprises
(collectively "DeGuelle") for $9.75 million. DeGuelle is a Durango,
Colorado-based petroleum marketing company. Included in the purchase
were seven service station/convenience stores, two cardlock commercial
fleet fueling facilities, a gasoline and diesel storage bulk plant and
related transportation equipment. All of the facilities are located in
southwestern Colorado and will be supplied by the Company's
refineries. In 1997, DeGuelle had sales of approximately 10.0 million
gallons of gasoline and diesel fuel in addition to 35,000 gallons of
lubricants.

     The Ciniza refinery began a major, every four year, maintenance
turnaround in mid-April that is scheduled to be completed by mid-May.
During this turnaround, the major operating units at the refinery will
be inspected and necessary repairs and maintenance performed. In
addition to the maintenance procedures, certain other procedures will
be performed that are expected to increase reformer capacity from
6,700 bbls per day to 7,500 bbls per day. The expansion of the
reformer increases the Company's ability to produce high-value
products, provides flexibility in gasoline conversion and increases
the refinery's capability to process condensate.

CAPITAL STRUCTURE
-----------------
     At March 31, 1998 and December 31, 1997, the Company's long-term
debt was 67.4% of total capital. The Company's net debt (long-term
debt less cash and cash equivalents) to total capitalization
percentages were 63.3% and 59.1% at March 31, 1998 and December 31,
1997, respectively.

     The Company's capital structure includes $150.0 million of 9%
senior subordinated notes due 2007 (the "9% Notes") and $100.0 million
of 9 3/4% senior subordinated notes due 2003 (the "9 3/4% Notes", and
collectively with the 9% Notes, the "Notes"). The Indentures
supporting the Notes contain covenants that, among other things,
restrict the ability of the Company and its subsidiaries to create
liens, incur or guarantee debt, pay dividends, sell certain assets or
subsidiary stock, engage in certain mergers, engage in certain
transactions with affiliates or alter the Company's current line of
business. In addition, subject to certain conditions, the Company is
obligated to offer to purchase a portion of the Notes at a price equal
to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase, with the net cash proceeds
of certain sales or other dispositions of assets. Upon a change of
control, which would include the proposed merger with Holly
Corporation as described below, the Company will be required to offer
to purchase all of the Notes at 101% of the principal amount thereof,
plus accrued interest, if any, to the date of purchase.

     Repayment of the Notes is jointly and severally guaranteed on an
unconditional basis by the Company's direct and indirect wholly-owned
subsidiaries, subject to a limitation designed to ensure that such
guarantees do not constitute a fraudulent conveyance. Except as
otherwise allowed in the Indenture pursuant to which the Notes were
issued, there are no restrictions on the ability of such subsidiaries
to transfer funds to the Company in the form of cash dividends, loans
or advances. General provisions of applicable state law, however, may
limit the ability of any subsidiary to pay dividends or make
distributions to the Company in certain circumstances.

     No separate financial statements of the subsidiaries are included
herein because the subsidiaries are jointly and severally liable; the
aggregate assets, liabilities, earnings, and equity of the
subsidiaries are substantially equivalent to the assets, liabilities,
earnings, and equity of the Company on a consolidated basis; and the
separate financial statements and other disclosures concerning the
subsidiaries are not deemed material to investors.

     The Company has a Credit Agreement, (as amended, the "Agreement")
with a group of banks with a maturity date of May 23, 2000. The
Agreement contains a $70.0 million unsecured capital expenditure
facility. On May 23, 1999, the borrowing commitment under the capital
expenditure facility is required to be reduced by $20.0 million. At
March 31, 1998 there were no outstanding balances under this facility. 

     In addition, the Agreement contains a three-year unsecured
working capital facility to provide working capital and letters of
credit in the ordinary course of business. The availability under this
working capital facility is the lesser of (i) $40.0 million, or (ii)
the amount determined under a borrowing base calculation tied to
eligible accounts receivable and inventories as defined in the
Agreement. At March 31, 1998, the lesser amount was $40.0 million.
There were no direct borrowings under this working capital facility at
March 31, 1998, and there were approximately $16.0 million of
irrevocable letters of credit outstanding, primarily to secure
purchases of raw materials. 

     The interest rate on these unsecured facilities is tied to
various short-term indices. At March 31, 1998, this rate was
approximately 6.5% per annum. The Company is required to pay a
quarterly commitment fee based on the unused amount of each facility.

     The Credit Agreement contains certain covenants and restrictions
which require the Company to, among other things, maintain a minimum
consolidated net worth; minimum fixed charge coverage ratio; minimum
funded debt to total capitalization percentage; and places limits on
investments, prepayment of senior subordinated debt, guarantees, liens
and restricted payments. The Credit Agreement is guaranteed by
substantially all of the Company's direct and indirect wholly-owned
subsidiaries.  

     On February 26, 1998, the Company's Board of Directors declared a
cash dividend on common stock of $0.05 per share payable to
stockholders of record on April 24, 1998. This dividend was paid on
May 6, 1998. Future dividends, if any, are subject to the results of
the Company's operations, existing debt covenants and declaration by
the Company's Board of Directors.

OTHER
-----
     Federal, state and local laws and regulations relating to health
and the environment affect nearly all of the operations of the
Company. As is the case with all companies engaged in similar
industries, the Company faces significant exposure from actual or
potential claims and lawsuits involving environmental matters. These
matters include soil and water contamination, air pollution and
personal injuries or property damage allegedly caused by substances
manufactured, handled, used, released or disposed of by the Company.
Future expenditures related to health and environmental matters cannot
be reasonably quantified in many circumstances for various reasons,
including the speculative nature of remediation and cleanup cost
estimates and methods, imprecise and conflicting data regarding the
hazardous nature of various types of substances, the number of other
potentially responsible parties involved, various defenses which may
be available to the Company and changing environmental laws and
interpretations of environmental laws.

     Rules and regulations implementing federal, state and local laws
relating to health and the environment will continue to affect the
operations of the Company. The Company cannot predict what health or
environmental legislation or regulations will be enacted or become
effective in the future or how existing or future laws or regulations
will be administered or enforced with respect to products or
activities of the Company. Compliance with more stringent laws or
regulations, as well as more vigorous enforcement policies of the
regulatory agencies, could have an adverse effect on the financial
position and the results of operations of the Company and could
require substantial expenditures by the Company for the installation
and operation of refinery equipment, pollution control systems and
other equipment not currently possessed by the Company.

     On April 15, 1998, the Company announced that it had entered into
an Agreement and Plan of Merger (the "Merger Agreement") with Holly
Corporation ("Holly"). Pursuant to the Merger Agreement, among other
things:

     (i)  Holly will be merged with and into Giant.

     (ii) Based upon the number of shares of Giant Common Stock and
Holly Common Stock and the number of Holly stock options and Holly
phantom stock rights outstanding as of April 30, 1998, each
outstanding share of Holly Common Stock would be converted into the
right to receive approximately 1.33 shares of Giant Common Stock plus
$2.886 in cash.

     Holly, listed on the American Stock Exchange, is an independent
refiner of petroleum and petroleum derivatives and produces high-value
light products such as gasoline, diesel fuel and jet fuel that are
sold primarily in the southwestern United States, northern Mexico and
Montana. Principal gasoline customers include other refineries,
convenience store chains, independent marketers, an affiliate of the
Mexican energy company PEMEX and retailers. Its diesel fuel is sold to
end users, wholesalers, and independent dealers. Jet fuel is sold
primarily to the military. Subsidiaries of Holly operate refineries in
New Mexico and Montana and own, lease, and operate 950 miles of
refined product pipelines, 625 miles of crude oil gathering pipelines,
seven product terminals, and an asphalt marketing business. 
     
     The merger has received the approval of both companies' Board of
Directors. Completion of the transaction is scheduled for the
beginning of the third quarter of 1998, subject to receiving necessary
government approvals and approvals of the stockholders of both
companies.

     The Company has entered into agreements to acquire thirty-three
service station/convenience stores from Kaibab Industries, Inc.  The
retail units, located throughout Arizona, include fifteen in the
greater Phoenix area and eleven in the Tucson market, with the balance
located primarily in southern and eastern Arizona. Other assets in the
acquisition include fuel truck/transports, other related equipment,
fuel inventories and some undeveloped real estate. These units have
had sales of approximately 70.0 million gallons of refined petroleum
products per year. The acquisition is expected to close in the second
quarter of 1998 subject to normal pre-closing conditions, due
diligence procedures and regulatory approvals.

     In November 1997, the Company announced the execution of an
agreement to acquire the assets of Ever-Ready Oil Co., Inc. and a
related entity (collectively "Ever-Ready"). The Company has canceled
this agreement because it appears that certain first rights to
purchase will be exercised. However, the Company continues to evaluate
its options relative to the purchase of the Ever-Ready assets in the
event these assets are not sold pursuant to the first rights to
purchase. 

     The Company believes that local crude oil production currently
approximates local crude oil demand in the Four Corners area where the
Company's two refineries are located. The Company is currently able to
supplement local crude oil supplies and process up to 1,500 bbls per
day of Alaska North Slope crude oil ("ANS") through its gathering
systems interconnection with the Four Corners and Texas-New Mexico
common carrier pipeline systems. Based on projections of local crude
oil availability from the field the Company believes an adequate
supply of crude oil and other feedstocks will be available from local
producers, crude oil sourced through common carrier pipelines and
other sources to sustain refinery operations for the foreseeable
future at substantially the levels currently being experienced.
However, there is no assurance that this situation will continue. Any
significant long-term interruption in crude oil supply or the crude
oil transportation system would have an adverse effect on the
Company's operations.

     The Company continues to evaluate other supplemental crude oil
supply alternatives for its refineries on both a short-term and long-
term basis.

     The Company is aware of a number of actions, proposals or
industry discussions regarding product pipeline projects that could
impact portions of its marketing areas. One of these projects, the
expansion of the ATA Line (formerly called the Emerald Line) into
Albuquerque was completed in 1997. Another of these announced
projects, which would result in a refined products pipeline from
Southeastern New Mexico to the Albuquerque and Four Corners areas, is
reportedly scheduled for completion in 1998. In addition, various
proposals or actions have been announced to increase the supply of
pipeline-supplied products to El Paso, Texas, which is connected by
pipeline to the Albuquerque area to the north. The completion of some
or all of these projects would result in increased competition by
increasing the amount of refined products available in the
Albuquerque, Four Corners and other areas, as well as allowing
additional competitors improved access to these areas.

     The Year 2000 ("Y2K") issue is the result of computer systems
using a two-digit format rather than four to define the applicable
year. Such computer systems will be unable to properly interpret dates
beyond the year 1999, which could lead to system failure or
miscalculations causing disruptions of operations. In 1997, the
Company outlined a three phase program for Y2K compliance, identifying
three major areas determined to be critical for successful compliance
(1) Financial and informational system applications, (2) Manufacturing
and process applications and (3) Business relationships. 

     In the financial and information system area, a number of
applications have been identified as being Y2K compliant due to their
recent implementation. The Company's core financial and reporting
systems are not Y2K compliant but were already scheduled for
replacement by mid-1999. Some subsidiary financial systems will either
be added to this replacement project or will require internal systems
revisions to be Y2K compliant. The Company believes it will cost
approximately $2,500,000 to replace the core financial and reporting
systems and has identified the potential for 4,000 man hours of work
to bring the remaining financial and informational system applications
into compliance at an estimated cost of approximately $800,000. The
Company is interviewing outside consultants to undertake a portion of
the work and expects approximately two-thirds of the cost to be
incurred in 1998 and the remainder in 1999. The Company is also
evaluating the possibility of replacing some of these remaining non-
compliant systems in an effort to reduce the projected man-hours
involved to bring these systems into compliance.

     In the manufacturing and process area and the business
relationship area, the Company is in the process of identifying areas
of exposure and has not yet determined what costs will be incurred in
connection with bringing these areas into compliance.  Preliminary
indications are that the manufacturing and process areas will not
involve a material amount of time and expense to become compliant.

     "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: This report contains forward-looking statements
that involve risks and uncertainties, including but not limited to
economic, competitive and governmental factors affecting the Company's
operations, markets, products, services and prices; the successful
completion of the major maintenance turnaround and start-up of the
operating units at the Ciniza Refinery; the completion of the merger
with Holly Corporation; the closing on the acquisition of thirty-three
service station/convenience stores from Kaibab Industries, Inc.; the
adequacy of raw material supplies; the potential effects of various
pipeline projects as they relate to the Company's market area and
future profitability; the ability of the Company to become Y2K
compliant and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission.

<PAGE>
<PAGE>
                                  PART II

                             OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

     There are no material pending legal proceedings required to be
reported pursuant to Item 103 of Regulation S-K. The Company is a
party to ordinary routine litigation incidental to its business. In
addition, there is hereby incorporated by reference the information 
regarding contingencies in Note 5 to the Unaudited Condensed
Consolidated Financial Statements set forth in Item 1, Part I hereof
and the discussion of certain contingencies contained herein under the
heading "Liquidity and Capital Resources - Other."

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The annual meeting of stockholders was held on May 8, 1998.
Proxies for the meeting were solicited under Regulation 14A. There
were no matters submitted to a vote of security holders other than the
election of two directors and approval of auditors as specified in the
Company's Proxy Statement. There was no solicitation in opposition to
management's nominees to the Board of Directors.

     James E. Acridge was elected as a director of the Company.  The
vote was as follows:

             SHARES VOTED       SHARES VOTED
                "FOR"           "WITHHOLDING" 
             ------------       -------------
              9,825,286            70,222

     Richard T. Kalen, Jr. was elected as a director of the Company. 
The vote was as follows: 

             SHARES VOTED       SHARES VOTED
                "FOR"           "WITHHOLDING"
             ------------       -------------
              9,809,295            86,213

     Deloitte & Touche LLP were ratified as independent auditors for
the Company for the year ending December 31, 1998.  The vote was as
follows:

             SHARES VOTED       SHARES VOTED        SHARES VOTED
                "FOR"            "AGAINST"          "ABSTAINING"
             ------------       ------------        -------------
              9,881,840            4,053                9,615

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     10.1 - Third Amendment, dated as of August 25, 1997, to Credit
            Agreement, dated October 4, 1995, among Giant Industries,
            Inc., as Borrower, Giant Industries Arizona, Inc., Giant
            Exploration & Production Company, San Juan Refining
            Company, Giant Four Corners, Inc., Ciniza Production
            Company and Phoenix Fuel Co., Inc. as Guarantors, and
            Bank of America National Trust and Savings Association,
            as Agent, Bank of America National Trust and Savings
            Association (successor to Bank of America Illinois), as
            Issuing Bank and as a Bank, The First National Bank of
            Chicago (successor to NBD Bank, by assignment), as a
            Bank and Union Bank of California, N.A. (formerly
            known as Union Bank), as a Bank. 

     27   - Financial Data Schedule.

(b)  Reports on Form 8-K. Report on Form 8-K for the date April 14,
     1998, with respect to the approval by the Company's Board of
     Directors of an Agreement and Plan of Merger whereby Holly
     Corporation would be merged with and into the Company.<PAGE>
<PAGE>
                                 SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 10-Q for the
quarter ended March 31, 1998 to be signed on its behalf by the
undersigned thereunto duly authorized.

                           GIANT INDUSTRIES, INC.


                          /s/ A. WAYNE DAVENPORT
                          --------------------------------------------
                          A. Wayne Davenport
                          Vice President and Chief Financial Officer
                          (Principal Financial and Accounting Officer)

Date: May 14, 1998