<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, 1999

                              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, 1999: 10,844,767 shares.
<PAGE>
<PAGE>
             GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                             INDEX


PART I  - FINANCIAL INFORMATION

Item 1  - Financial Statements

          Condensed Consolidated Balance Sheets
          March 31, 1999 (Unaudited) and December 31, 1998

          Condensed Consolidated Statements of Earnings (Loss)
          Three Months Ended March 31, 1999 and 1998
          (Unaudited) 

          Condensed Consolidated Statements of Cash Flows
          Three Months Ended March 31, 1999 and 1998 (Unaudited) 

          Notes to Condensed Consolidated Financial Statements
          (Unaudited) 

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

Item 3  - Quantitative and Qualitative Disclosures About Market Risk

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, 1999   December 31, 1998
                                                                   --------------   -----------------
                                                                    (Unaudited)
<S>                                                                   <C>             <C>
ASSETS

Current assets:
  Cash and cash equivalents....................................       $  22,598       $  55,697
  Receivables, net.............................................          54,065          50,195
  Inventories..................................................          58,328          51,349
  Prepaid expenses and other...................................          10,093           7,860
  Deferred income taxes........................................           6,625           6,625
                                                                      ---------       ---------
     Total current assets......................................         151,709         171,726
                                                                      ---------       ---------
Property, plant and equipment..................................         447,880         439,940
  Less accumulated depreciation and amortization...............        (144,009)       (138,008)
                                                                      ---------       ---------
                                                                        303,871         301,932
                                                                      ---------       ---------
Goodwill, net..................................................          22,635          22,902
Other assets...................................................          28,599          29,225
                                                                      ---------       ---------
                                                                      $ 506,814       $ 525,785
                                                                      =========       =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt............................       $     254       $   1,200
  Accounts payable.............................................          47,261          42,903
  Accrued expenses.............................................          37,220          36,519
                                                                      ---------       ---------
     Total current liabilities.................................          84,735          80,622
                                                                      ---------       ---------
Long-term debt, net of current portion.........................         258,455         282,484
Deferred income taxes..........................................          27,001          26,793
Other liabilities and deferred income..........................           8,063           8,184
Commitments and contingencies (Notes 5 and 6)
Common stockholders' equity....................................         128,560         127,702
                                                                      ---------       ---------
                                                                      $ 506,814       $ 525,785
                                                                      =========       =========

See accompanying notes to condensed consolidated financial statements.
</TABLE>
<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,
                                                             ------------------------------
                                                                1999               1998
                                                             -----------        -----------
<S>                                                          <C>                <C>
Net revenues...........................................      $   149,021        $   145,716
Cost of products sold..................................           99,687            105,752
                                                             -----------        -----------
Gross margin...........................................           49,334             39,964
Operating expenses.....................................           27,660             25,449
Depreciation and amortization..........................            7,338              6,789
Selling, general and administrative expenses...........            7,362              5,259
                                                             -----------        -----------
Operating income.......................................            6,974              2,467
Interest expense, net..................................            5,590              5,599
                                                             -----------        -----------
Earnings (loss) before income taxes....................            1,384             (3,132)
Provision (benefit) for income taxes...................              526             (1,450)
                                                             -----------        -----------
Net earnings (loss)....................................      $       858        $    (1,682) 
                                                             ===========        ===========
Net earnings (loss) per common share:
  Basic................................................      $      0.08        $     (0.15) 
                                                             ===========        ===========
  Assuming dilution....................................      $      0.08        $     (0.15) 
                                                             ===========        ===========

See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
                     GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                  (In thousands)
<CAPTION>
                                                                          Three Months Ended
                                                                               March 31,
                                                                         --------------------
                                                                           1999        1998
                                                                         --------    --------
<S>                                                                      <C>         <C>
Cash flows from operating activities:
  Net earnings (loss)...........................................         $    858    $ (1,682)
  Adjustments to reconcile net earnings (loss) to net 
    cash provided (used) by operating activities:
      Depreciation and amortization.............................            7,338       6,789
      Deferred income taxes.....................................              208        (200)
      Other.....................................................              208          42
      Changes in operating assets and liabilities:
        (Increase) decrease in receivables......................           (3,108)      8,665
        Increase in inventories.................................           (6,987)     (9,849)
        Increase in prepaid expenses and other..................           (2,253)     (2,568)
        Increase (decrease) in accounts payable.................            4,358      (9,570)
        Increase (decrease) in accrued expenses.................              700      (2,995)
                                                                         --------    --------
Net cash provided (used) by operating activities................            1,322     (11,368)
                                                                         --------    --------
Cash flows from investing activities:
  Purchases of property, plant and equipment and other assets...           (9,530)    (12,658)
  Business acquisition..........................................                       (9,761)
  Proceeds from sale of property, plant and equipment...........              121         186
                                                                         --------    --------
Net cash used by investing activities...........................           (9,409)    (22,233)
                                                                         --------    --------
Cash flows from financing activities: 
  Payments of long-term debt....................................          (24,974)     (3,643)
  Payment of dividends..........................................                         (550)
  Deferred financing costs......................................              (38)        (64)
                                                                         --------    --------
Net cash used by financing activities...........................          (25,012)     (4,257)
                                                                         --------    --------
Net decrease in cash and cash equivalents.......................          (33,099)    (37,858)
Cash and cash equivalents: 
  Beginning of period...........................................           55,697      82,592
                                                                         --------    --------
  End of period.................................................         $ 22,598    $ 44,734
                                                                         ========    ========

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

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:

    Giant Industries, Inc., a Delaware corporation ("Giant" or, together
with its subsidiaries, the "Company"), through its wholly-owned
subsidiary Giant Industries Arizona, Inc. ("Giant Arizona"), is engaged
in the refining and marketing of petroleum products in New Mexico,
Arizona, Colorado and Utah, with a concentration in the Four Corners
where these states adjoin. In addition, Phoenix Fuel Co., Inc. ("Phoenix
Fuel"), a wholly-owned subsidiary of Giant Arizona, operates an
industrial/commercial petroleum fuels and lubricants distribution
operation. (See Note 2 for further discussion of Company operations.)

     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, 1999 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1999. 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, 1998.

     In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which
will be effective for the Company's financial statements as of January
1, 2000. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires
that entities record all derivatives as either assets or liabilities,
measured at fair value, with any change in fair value recognized in
earnings or in other comprehensive income, depending on the use of the
derivative and whether it qualifies for hedge accounting. If certain
conditions are met, a derivative may be specifically designated as (a) a
hedge of the exposure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment, (b) a hedge of the
exposure to variable cash flows of a forecasted transaction, or (c) a
hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale
security, or a foreign-currency-denominated forecasted transaction.

     Under this Statement, an entity that elects to apply hedge
accounting is required to establish at the inception of the hedge the
method it will use for assessing the effectiveness of the hedging
derivative and the measurement approach for determining the ineffective
aspect of the hedge. Those methods must be consistent with the entity's
approach to managing risk. The Company has not completed evaluating the
effects this Statement will have on its financial reporting and
disclosures. 

     Selling, general and administrative expenses of approximately
$556,000 relating to specific accounting and information system costs
associated with the Company's retail operations have been reclassified
to operating expenses in the Condensed Consolidated Statements of
Earnings (Loss) for the three months ended March 31, 1998, to conform to
the March 31, 1999, classification which the Company believes more
accurately reflects the nature of such costs.<PAGE>
<PAGE>
NOTE 2 - COMPANY OPERATIONS

     The Company is organized into three operating segments based on
manufacturing and marketing criteria. These segments are the Refining
Group, the Retail Group and Phoenix Fuel. A description of each segment
and principal products and operations are as follows:

     - Refining Group: The Refining Group consists of the Company's two
refineries, its fleet of crude oil and finished product truck
transports, its crude oil pipeline gathering operations and its finished
product terminaling operations. The Company's two refineries manufacture
various grades of gasoline, diesel fuel, jet fuel and other products
from crude oil, other feedstocks and blending components. These products
are sold through company-operated retail facilities, independent
wholesalers and retailers, industrial/commercial accounts and sales and
exchanges with major oil companies. Crude oil, other feedstocks and
blending components are purchased from third party suppliers.

     - Retail Group: The Retail Group consists of service
station/convenience stores and one travel center. These operations sell
various grades of gasoline, diesel fuel, general merchandise and food
products to the general public through retail locations. The petroleum
fuels sold by the Retail Group are supplied by the Refining Group, which
either manufactures these refined products or acquires them through
exchange arrangements, third party purchases, or from Phoenix Fuel.
General merchandise and food products are obtained from third party
suppliers.

     - Phoenix Fuel: Phoenix Fuel is an industrial/commercial petroleum
fuels and lubricants distribution operation, which includes a number of
bulk distribution plants, an unattended fleet fueling ("cardlock")
operation and a fleet of finished product truck transports. The
petroleum fuels and lubricants sold are primarily obtained from third
party suppliers and to a lesser extent from the Refining Group.

     Operations that are not included in any of the three segments are
included in the category "Other" and consist primarily of corporate
office operations, including selling, general and administrative
expenses of $7,179,000 and $4,963,000 for the first quarter of 1999 and
1998, respectively.

     Operating income for each segment consists of net revenues less
cost of products sold, operating expenses, depreciation and amortization
and the segment's selling, general and administrative expenses. The
sales between segments are made at market prices. Cost of products sold
reflect current costs adjusted for LIFO and lower of cost or market
inventory adjustments.

     The total assets of each segment consist primarily of net property,
plant and equipment, inventories, accounts receivable and other assets
directly associated with the segment's operations. Included in the total
assets of the corporate office operations are a majority of the
Company's cash and cash equivalents, various accounts receivable, net
property, plant and equipment and other long-term assets.
<PAGE>
<PAGE>
     Disclosures regarding the Company's reportable segments with
reconciliations to consolidated totals are presented below.

<TABLE>
<CAPTION>

                                       As of and for the Three Months Ended March 31, 1999 (In thousands)
                                       -----------------------------------------------------------------
                                       Refining   Retail   Phoenix           Reconciling
                                        Group     Group      Fuel    Other     Items      Consolidated
                                       --------  --------  -------  -------  -----------  ------------
<S>                                    <C>       <C>       <C>      <C>       <C>           <C>
Customer net revenues...............   $ 33,054  $ 68,251  $47,674  $    42                 $149,021
Intersegment net revenues...........     31,364              1,168            $(32,532)
                                       --------  --------  -------  -------   --------      --------
Total net revenues..................   $ 64,418  $ 68,251  $48,842  $    42   $(32,532)     $149,021
                                       --------  --------  -------  -------   --------      --------
Operating income....................   $ 10,639  $  1,341  $ 2,131  $(7,137)           $  6,974
Interest expense....................                                                          (6,051)
Interest income.....................                                                             461
                                                                                            --------
Earnings before income taxes........                                                        $  1,384
                                                                                            --------
Depreciation and amortization.......   $  3,840  $  2,105  $   555  $   838                 $  7,338
Total assets........................   $247,627  $128,090  $68,005  $63,092                 $506,814
Capital expenditures................   $  2,221  $  6,656  $   342  $   311                 $  9,530
</TABLE>

<TABLE>
<CAPTION>

                                       As of and for the Three Months Ended March 31, 1998 (In thousands)
                                       -----------------------------------------------------------------
                                       Refining   Retail   Phoenix           Reconciling
                                        Group     Group      Fuel    Other     Items      Consolidated
                                       --------  --------  -------  -------  -----------  ------------
<S>                                    <C>       <C>       <C>      <C>       <C>           <C>
Customer net revenues...............   $ 45,924  $ 56,512  $43,178  $   102                 $145,716
Intersegment net revenues...........     28,449       679      753            $(29,881)
                                       --------  --------  -------  -------   --------      --------
Total net revenues..................   $ 74,373  $ 57,191  $43,931  $   102   $(29,881)     $145,716
                                       --------  --------  -------  -------   --------      --------
Operating income....................   $  3,721  $  2,337  $ 1,270  $(4,861)                $  2,467
Interest expense....................                                                          (6,500)
Interest income.....................                                                             901
                                                                                            --------
Loss before income taxes............                                                        $ (3,132)
                                                                                            --------
Depreciation and amortization.......   $  3,444  $  2,051  $   481  $   813                 $  6,789
Capital expenditures................   $  7,755  $  3,736  $   458  $   503                 $ 12,452
</TABLE>
<PAGE>
<PAGE>
NOTE 3 - EARNINGS PER SHARE:

     The following is a reconciliation of the numerators and
denominators of the basic and diluted per share computations for net
earnings (loss):

<TABLE>
<CAPTION>
                                                Three Months Ended March 31, 
                             -------------------------------------------------------------------
                                           1999                               1998
                             --------------------------------   --------------------------------
                                                        Per                                Per
                              Earnings       Shares    Share       Loss         Shares    Share
                             (Numerator) (Denominator) Amount   (Numerator) (Denominator) Amount
                             ----------- ------------- ------   ----------- ------------- ------
<S>                           <C>          <C>          <C>      <C>          <C>          <C>
Earnings (loss) per common 
  share - basic

  Net earnings (loss)         $858,000     10,838,767   $0.08    $(1,682,000) 10,993,267   $(0.15)

  Effect of dilutive
    stock options                               8,517                                  -*
                              --------     ----------   -----    -----------  ----------   ------
Earnings (loss) per common 
  share - assuming dilution

  Net earnings (loss)         $858,000     10,847,284   $0.08    $(1,682,000) 10,993,267   $(0.15)
                              ========     ==========   =====    ===========  ==========   ======
</TABLE>

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

     There were no transactions subsequent to March 31, 1999, that if
the transactions had occurred before March 31, 1999, would materially
change the number of common shares or potential common shares
outstanding as of March 31, 1999.


<PAGE>
<PAGE>
NOTE 4 - INVENTORIES:

<TABLE>
<CAPTION>
                                                          March 31, 1999     December 31, 1998
                                                          --------------     -----------------
                                                                    (In thousands)
<S>                                                          <C>                  <C>
Inventories consist of the following:

First-in, first-out ("FIFO") method:
  Crude oil.........................................         $ 9,176              $ 8,419
  Refined products..................................          20,725               17,956
  Refinery and shop supplies........................           9,700                9,648
  Merchandise.......................................           4,680                4,568
Retail method:
  Merchandise.......................................           7,278                7,460
                                                             -------              -------
                                                              51,559               48,051
Adjustment for last-in, first-out("LIFO") method.....         12,679               14,758
Allowance for lower of cost or market...............          (5,910)             (11,460)
                                                             -------              -------
                                                             $58,328              $51,349
                                                             =======              =======
</TABLE>

     The portion of inventories valued on a LIFO basis totaled
$37,689,000 and $30,423,000 at March 31, 1999 and December 31, 1998,
respectively. The following data will facilitate comparison with the
operating results of companies using the FIFO method of inventory
valuation.

     If inventories had been determined using the FIFO method at
March 31, 1999 and 1998, net earnings and diluted earnings per share
for the three months ended March 31, 1999 would have been lower by
$2,083,000 and $0.19, respectively, and the net loss and diluted loss
per share for the three months ended March 31, 1998 would have been
higher by $2,213,000 and $0.20, respectively.<PAGE>
<PAGE>
NOTE 5 - LONG-TERM DEBT:

     The Company has issued $150,000,000 of 9% senior subordinated
notes due 2007 (the "9% Notes") and $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 restrictive covenants that, among other things, restrict the
ability of the Company and its subsidiaries to create liens, to incur
or guarantee debt, to pay dividends, to repurchase shares of the
Company's common stock, to sell certain assets or subsidiary stock,
to engage in certain mergers, to engage in certain transactions with
affiliates or to alter the Company's current line of business. At
March 31, 1999, the Company was in compliance with the covenants
relating to the 9% Notes, but was precluded from making restricted
payments pursuant to one of the covenants relating to the 9 3/4%
Notes. As defined in the Indenture supporting the 9 3/4% Notes,
restricted payments include the payment of dividends and the
repurchase of shares of the Company's common stock. At March 31,
1999, the terms of the Indenture supporting the 9 3/4% Notes also
restricted the amount of money the Company could borrow. This amount
is the greater of $40,000,000 or the amount determined under a
borrowing base calculation tied to eligible accounts receivable and
inventories as defined in the Indenture. At March 31, 1999, this
amount was approximately $80,825,000. 

     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, the
Company would 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.

     In accordance with the Indentures supporting the Notes, the
Company must either use the net proceeds of approximately $50,100,000
from the sale-leaseback transaction between the Company and FFCA
Capital Holding Corporation ("FFCA") completed in December 1998, in
which the Company sold eighty-three service stations/convenience
stores to FFCA and leased them back, to make a permanent reduction in
senior indebtedness (as defined in the respective Indentures), or
make an investment in capital assets used in the Company's principal
business (as defined in the respective Indentures). The Company has
360 days in which to use the net proceeds for such a purpose under
the terms of the Indenture supporting the 9% Notes, and has 270 days
under the terms of the Indenture supporting the 9 3/4% Notes. In each
case, upon completion of the specified period, if all of the net
proceeds have not been used for such a purpose, the Company may be
obligated, under certain circumstances, to repurchase the respective
senior subordinated notes with the unused portion. The Company
anticipates that it will use the net proceeds from the FFCA
transaction to invest in capital assets or to reduce senior
indebtedness before the applicable periods expire.

     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 6 - COMMITMENTS AND CONTINGENCIES:

     Various legal actions, claims, assessments and other
contingencies arising in the normal course of the Company's business,
including those matters described below, are pending against the
Company and certain of its subsidiaries. Certain of these matters
involve or may involve significant claims for compensatory, punitive
or other damages. These matters are subject to many uncertainties,
and it is possible that some of these matters could be ultimately
decided, resolved or settled adversely. The Company has recorded
accruals for losses related to those matters that it considers to be
probable and that can be reasonably estimated. Although the ultimate
amount of liability at March 31, 1999, which may result from these
matters is not ascertainable, the Company believes that any amounts
exceeding the Company's recorded accruals should not materially
affect the Company's financial condition. It is possible that the
ultimate resolution of these matters could result in a material
adverse effect on the Company's results of operations for a
particular reporting period.

     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 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 Company, and several other entities, have received a notice
of intent to file suit from the New Mexico Office of the Natural
Resources Trustee (the "ONRT") for the recovery of $260,000,000 in
alleged damages to natural resources, including alleged damages to
ground water, surface water and soil. The ONRT may revise its damage
estimate after a damage assessment is completed. The notice relates
to the South Valley Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") Superfund site in
Albuquerque, New Mexico. The site allegedly includes contamination
that originated from a GE Aircraft Engines/U.S. Air Force facility,
as well as contamination that allegedly originated from a petroleum
products terminal that was acquired by the Company in 1995 (the
"Albuquerque Terminal"). Potentially responsible party liability is
joint and several, such that a responsible party may be liable for
all natural resources damages at a site even though it was
responsible for only a small part of such damages. At the time of
purchase by the Company, Texaco Refining and Marketing Inc.
("Texaco") agreed to defend, indemnify, reimburse and hold the
Company harmless from and against all claims and damages arising
from, or caused by, pre-closing contamination. Texaco has
acknowledged its obligation under this agreement, subject to any
evidence that the ONRT intends to assess damages for any releases
resulting from the Company's operations. The Company believes that
any natural resources damages associated with the South Valley
Superfund site relate to releases that predate the Company's
acquisition of the Albuquerque Terminal and, accordingly, does not
believe that it needs to record a liability in connection with this
matter.

     In May 1991, the Environmental Protection Agency ("EPA")
notified the Company 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")
CERCLA Superfund site. The Landfill is adjacent to the Company's
inactive Farmington refinery. This refinery was operated until 1982.
Although a final plan of action for the Superfund site has not yet
been adopted by the Bureau of Land Management (the "BLM"), the owner
of the Landfill, BLM developed a proposed plan of action in 1996,
which it projected would 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, BLM is
proposing to take additional remedial actions with an estimated cost
of approximately $1,800,000.
 
     In 1989, a consultant to the Company estimated, based on various
assumptions, that the Company's share of potential liability could be
approximately $1,200,000. This figure was based upon estimated
Landfill remediation costs significantly higher than those being
proposed by BLM. The figure was also based on the consultant's
evaluation of such factors as available clean-up technology, BLM's
involvement at the site and the number of other entities that may
have had involvement at the site, but did not include an analysis of
all of the Company's potential legal defenses and arguments,
including possible setoff rights. 

     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 the party was responsible for only a
small part of such costs. Although it is possible that the Company
may ultimately incur liability for clean-up costs associated with the
Landfill, a reasonable estimate of the amount of this liability, if
any, cannot be made at this time because, among other reasons, the
final site remedy has not been selected, a number of entities had
involvement at the site, allocation of responsibility among
potentially responsible parties has not yet been made, and
potentially-applicable factual and legal issues have not been
resolved. Based on current information, the Company does not believe
that it needs to record a liability in relation to BLM's proposed
plan.

     The Company is undertaking an investigation into potential lead
contamination at a 5.5 acre site that the Company owns in Bloomfield,
New Mexico. The investigation arises out of the removal of a 55,000
barrel crude oil storage tank by a contractor. The Company has
completed a survey that indicates that lead levels in the soil at
this site are below Environmental Protection Agency cleanup levels
for industrial and residential sites. The Company has submitted this
report to the New Mexico Energy, Minerals and Natural Resources
Department (the "EMNRD"). Based upon the results of the survey, the
Company believes that it is unlikely that the EMNRD will require the
Company to undertake lead cleanup activities at the site. 

     The Company has an environmental liability accrual of
approximately $2,700,000. Approximately $800,000 relates to ongoing
environmental projects, including the remediation of a hydrocarbon
plume that appears to extend no more than 1,800 feet south of the
inactive Farmington refinery and hydrocarbon contamination on and
adjacent to 5.5 acres the Company owns in Bloomfield, New Mexico. The
remaining $1,900,000 relates to an originally estimated liability of
approximately $2,300,000, recorded in the second quarter of 1996, for
certain environmental obligations assumed in the acquisition of the
Bloomfield refinery. That amount was recorded as an adjustment to the
purchase price and allocated to the assets acquired. The
environmental accrual is recorded in the current and long-term
sections of the Company's Consolidated Balance Sheets.

     The Company is subject to audit on an ongoing basis of the
various taxes that it pays to federal, state, local and tribal
agencies. These audits may result in assessments or refunds along
with interest and penalties. In some cases the jurisdictional basis
of the taxing authority is in dispute and is the subject of
litigation or administrative appeals. The Company has received
several tax notifications and assessments from the Navajo Tribe
relating to Company operations 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 in
connection with crude oil removed from properties located within this
area. The Company has invoked its appeal rights with the Tribe's Tax
Commission in connection with this assessment and intends to oppose
the assessment. In November 1998, the Company received a notice of
proposed assessment from the Navajo Tribe for an additional
$2,100,000 involving severance tax issues similar to those raised in
connection with the $1,800,000 assessment. The Company has responded
to the notice of proposed assessment and intends to oppose any final
assessment issued by the Navajo Tribe in connection with the area of
disputed jurisdiction. Although it is probable that the Company will
incur liability in connection with tax notifications and assessments
from the Navajo Tribe relating to the area of disputed jurisdiction,
it is not possible to reasonably estimate the amount of any
obligation for such taxes at this time because the Navajo Tribe's
authority to impose taxes throughout this area has not been legally
established and all potentially-applicable factual issues have not
been resolved. The Company has accrued a liability for assessments
that it has received from the Navajo Tribe for substantially less
than the amount of the assessments. 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. The Company may potentially be able to request
reimbursement from third party oil lease interest owners in
connection with any severance tax amounts ultimately paid by the
Company that relate to purchases from them. 
<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, 1999, earnings before
income taxes were $1,384,000, an increase of $4,516,000 from a loss
before income taxes of $3,132,000 incurred for the three months ended
March 31, 1998. The increase is primarily due to (i) a 33% increase
in refinery margins; (ii) increased operating income from Phoenix
Fuel; (iii) increased merchandise sales from service
station/convenience stores that were open for more than twelve
months; and (iv) operating income from seven service
station/convenience stores acquired from DeGuelle Oil Company and
DeGuelle Enterprises in February 1998 and thirty-two service
station/convenience stores acquired, and the lease of one other, from
Kaibab Industries, Inc. in June and July 1998 (the "Acquisitions").
These increases were offset in part by increased operating and
administrative expenses and a 13% decline in retail finished product
margins, both related to the Company's other operations, excluding
the Acquisitions. 

REVENUES
--------
     Revenues for the three months ended March 31, 1999, increased
approximately $3,305,000 or 2% to $149,021,000 from $145,716,000 in
the comparable 1998 period. The increase is primarily due to the
Acquisitions, an 8% increase in wholesale fuel volumes sold by
Phoenix Fuel, a 21% increase in merchandise sales from service
station/convenience stores that were open for more than twelve months
and a 2% increase in refinery sourced finished product sales volumes.
These increases were offset in part by a 16% decline in refinery and
a 9% decrease in Phoenix Fuel weighted average selling prices.

     The volumes of refined products sold through the Company's
retail units increased approximately 41% from 1998 levels primarily
due to the Acquisitions. The volume of finished product sold from the
Company's travel center increased 14%, due in large part to improved
marketing programs. Finished product sales volumes from service
station/convenience stores that were open for more than twelve months
declined approximately 3%.
 
COST OF PRODUCTS SOLD
---------------------
     For the three months ended March 31, 1999, cost of products sold
decreased $6,065,000 or 6% to $99,687,000 from $105,752,000 in the
corresponding 1998 period. The decrease is primarily due to a 28%
decline in average crude oil costs and a 9% decline in the cost of
finished product purchased by Phoenix Fuel. These decreases in costs
were offset in part by increased costs related to finished product
and merchandise sales of the Acquisitions, an 8% increase in
wholesale fuel volumes sold by Phoenix Fuel, increased merchandise
sales for service station/convenience stores that were open for more
than twelve months and a 2% increase in refinery sourced finished
product sales volumes. 

OPERATING EXPENSES
------------------
     For the three months ended March 31, 1999, operating expenses
increased approximately $2,211,000 or 9% to $27,660,000 from
$25,449,000 for the three months ended March 31, 1998.

     Substantially all of the increase is due to the Acquisitions,
increased administrative and support costs related to the
Acquisitions and other retail expansion that has occurred over the
last two years, and increased lease expense related to a sale-
leaseback transaction between the Company and FFCA that was completed
in December 1998. These increases were offset in part by a reduction
in maintenance expenses for other Company operations and lower
refinery purchased fuel costs. 

DEPRECIATION AND AMORTIZATION
-----------------------------
     For the three months ended March 31, 1999, depreciation and
amortization increased approximately $549,000 or 8% to $7,338,000
from $6,789,000 in the same 1998 period.

     Approximately 24% 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 during 1998 and the amortization of 1998 refinery
turnaround costs. These increases were partially offset by a
reduction in depreciation expense related to the sale-leaseback
transaction between the Company and FFCA.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
--------------------------------------------
     For the three months ended March 31, 1999, selling, general and
administrative expenses ("SG&A") increased approximately $2,103,000
or 40% to $7,362,000 from $5,259,000 in the corresponding 1998
period.

     The increase is primarily due to expensing one-fourth of the
predetermined 1999 contribution to the Company's Employee Stock
Ownership Plan, expenses for the estimated costs of 1999 bonuses and
increased accruals for other employee benefit costs. These increases
were offset in part by insurance reimbursements received relating to
prior worker's compensation claims that had been paid by the Company. 

INTEREST EXPENSE, NET
---------------------
     For the three months ended March 31, 1999, net interest expense
(interest expense less interest income) was comparable to the same
1998 period.

     A reduction in interest expense primarily related to the
purchase of service station/convenience stores that were subject to
capital lease obligations was partially offset by a decrease in
interest and investment income due to the use of funds, which had
been invested in short-term instruments, for the Acquisitions and the
purchase of service station/convenience stores that were subject to
capital lease obligations. The effects of fluctuations in interest
rates applicable to invested funds were nominal.
 
INCOME TAXES
------------
     The effective tax rate for the three months ended March 31,
1999, was approximately 38% and the effective benefit rate for the
three months ended March 31, 1998 was approximately 46%. The
difference in the two rates is primarily due to deferred tax
adjustments.


LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW FROM OPERATIONS
-------------------------
     Operating cash flows increased for the first quarter of 1999
compared to the first quarter of 1998, primarily as a result of an
increase in cash flows related to the changes in operating assets and
liabilities, as well as higher net earnings. Net cash provided by
operating activities totaled $1,322,000 for the three months ended
March 31, 1999, compared to net cash used by operating activities of
$11,368,000 in the comparable 1998 period. 

WORKING CAPITAL
---------------
     Working capital at March 31, 1999 consisted of current assets of
$151,709,000 and current liabilities of $84,735,000, or a current
ratio of 1.79:1. At December 31, 1998, the current ratio was 2.13:1
with current assets of $171,726,000 and current liabilities of
$80,622,000.

     Current assets have decreased since December 31, 1998, primarily
due to a decrease in cash and cash equivalents, offset in part by an
increase in accounts receivable, inventories and prepaid items.
Accounts receivable have increased primarily due to an increase in
finished product selling prices. Inventories have increased due to an
increase in crude oil and refined product prices, and an increase in
refinery and Phoenix Fuel finished product volumes. The refinery
volume increases are partially related to the building of inventories
in anticipation of a minor scheduled maintenance turnaround at the
Ciniza refinery in the second quarter of 1999. Prepaid expenses
increased primarily as a result of the prepayment of a 1999
contribution to the Company's Employee Stock Ownership Plan. Current
liabilities have increased due to an increase in accounts payable and
accrued expenses. Accounts payable have increased primarily as a
result of an increase in the cost of raw materials for the refineries
and finished product purchased by Phoenix Fuel. Accrued expenses have
increased primarily as a result of increased accruals for payroll and
related costs and accruals for the estimated costs of 1999 bonuses.
These increases were offset in part by lower accrued interest costs
and the payment of 1998 accrued 401(k) Company matching
contributions. 

CAPITAL EXPENDITURES AND RESOURCES
----------------------------------
     Net cash used in investing activities for the purchase of
property, plant and equipment totaled approximately $9,530,000 for
the first quarter of 1999. Expenditures included amounts for, among
other things, construction costs related to the building of four new
service station/convenience stores, one of which was opened at the
end of March, and the rebuilding of two others; costs for remodeling,
re-branding, re-imaging and upgrading various retail units;
construction costs related to the Company's finished products
terminal near Flagstaff, Arizona, which is expected to open in May
1999; and expenditures in anticipation of the Ciniza refinery second
quarter turnaround.

     The Ciniza refinery began a minor maintenance turnaround on
April 5, 1999 that was completed on April 13, 1999. During this
turnaround, the reformer, naphtha hydrotreater, distillate
hydrotreater and isomerization units were shut down. During the
shutdown, the reformer catalyst was regenerated and a reformer heater
modification was completed. The other units were shut down due to a
lack of hydrogen supply from the reformer and some minor maintenance
was performed while they were shut down. 

CAPITAL STRUCTURE
-----------------
     At March 31, 1999 and December 31, 1998, the Company's long-term
debt was 66.8% and 68.9% of total capital, respectively, and the
Company's net debt (long-term debt less cash and cash equivalents) to
total capitalization percentages were 64.7% and 64.0%, respectively.

     The Company's capital structure includes $150,000,000 of 9%
senior subordinated notes due 2007 (the "9% Notes")and $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 restrictive covenants that, among other
things, restrict the ability of the Company and its subsidiaries to
create liens, to incur or guarantee debt, to pay dividends, to
repurchase shares of the Company's common stock, to sell certain
assets or subsidiary stock, to engage in certain mergers, to engage
in certain transactions with affiliates or to alter the Company's
current line of business. At March 31, 1999, the Company was in
compliance with the covenants relating to the 9% Notes, but was
precluded from making restricted payments pursuant to one of the
covenants relating to the 9 3/4% Notes. As defined in the Indenture
supporting the 9 3/4% Notes, restricted payments include the payment
of dividends and the repurchase of shares of the Company's common
stock. At March 31, 1999, the terms of the Indenture supporting the 9
3/4% Notes also restricted the amount of money the Company could
borrow. This amount is the greater of $40,000,000 or the amount
determined under a borrowing base calculation tied to eligible
accounts receivable and inventories as defined in the Indenture. At
March 31, 1999, this amount was approximately $80,825,000. 

     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, the
Company would 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.

     In accordance with the Indentures supporting the Notes, the
Company must either use the net proceeds of approximately $50,100,000
from the sale-leaseback transaction between the Company and FFCA
completed in December 1998, in which the Company sold eighty-three
service station/convenience stores to FFCA and leased them back, to
make a permanent reduction in senior indebtedness (as defined in the
respective Indentures), or make an investment in capital assets used
in the Company's principal business (as defined in the respective
Indentures). The Company has 360 days in which to use the net
proceeds for such a purpose under the terms of the Indenture
supporting the 9% Notes, and has 270 days under the terms of the
Indenture supporting the 9 3/4% Notes. In each case, upon completion
of the specified period, if all of the net proceeds have not been
used for such a purpose, the Company may be obligated, under certain
circumstances, to repurchase the respective senior subordinated notes
with the unused portion. The Company anticipates that it will use the
net proceeds from the FFCA transaction to invest in capital assets or
to reduce senior indebtedness before the applicable periods expire.

     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 Indentures 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 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; the subsidiaries are jointly and severally liable
for the repayment of the Notes; and the separate financial statements
and other disclosures concerning the subsidiaries are not deemed
material to investors.

     The Company has a $65,000,000 secured Credit Agreement (the
"Credit Agreement") due December 23, 2001, with a group of banks.
This Credit Agreement, a revolving loan agreement, is primarily a
working capital and letter of credit facility and is secured by
eligible accounts receivable and inventories as defined in the Credit
Agreement. In addition, the Company is able to borrow up to
$9,000,000 to exercise its purchase rights in connection with certain
service station/convenience stores that are currently subject to
capital lease obligations, and up to $10,000,000 for other
acquisitions as defined in the Credit Agreement. The availability of
funds under this facility is the lesser of (i) $65,000,000, or (ii)
the amount determined under a borrowing base calculation tied to the
eligible accounts receivable and inventories. At March 31, 1999, the
availability of funds under the Credit Agreement was approximately
$57,753,000. There were no direct borrowings outstanding under this
facility at March 31, 1999, and there were approximately $8,887,000
of irrevocable letters of credit outstanding, primarily to secure
purchases of raw materials. 

     The interest rate applicable to the Credit Agreement is tied to
various short-term indices. At March 31, 1999, this rate was
approximately 6.5% per annum. The Company is required to pay a
quarterly commitment fee ranging from 0.325% to 0.500% per annum of
the unused amount of the facility. The exact rate depends on meeting
certain conditions in the Credit Agreement.

     The Credit Agreement contains certain covenants and restrictions
which require the Company to, among other things, maintain a minimum
consolidated net worth, a minimum interest coverage ratio and a
maximum capitalization ratio. It also places limits on investments,
dispositions of assets, prepayments of senior subordinated debt,
guarantees, liens and restricted payments. At March 31, 1999, the
Company was in compliance with the Credit Agreement's covenants and
was not aware of any noncompliance with the other terms of the Credit
Agreement. The Credit Agreement is guaranteed by all of the Company's
direct and indirect wholly-owned subsidiaries.

     The Company's Board of Directors has authorized the repurchase
of 2,500,000 shares of the Company's common stock. Purchases may be
made from time to time as conditions permit. Shares may be
repurchased through privately-negotiated transactions, block share
purchases and open market transactions. From the inception of the
stock repurchase program, the Company has repurchased 1,393,600
shares for approximately $14,510,000, resulting in a weighted average
cost of $10.41 per share.

     Repurchased shares are available for a number of corporate
purposes. The number of shares actually repurchased will be dependent
upon market conditions and existing debt covenants, and there is no
guarantee as to the exact number of shares to be repurchased by the
Company. The Company may discontinue the program at any time without
notice. The Company has currently suspended the acquisition of shares
of its common stock under this program due to the restriction noted
above.

     The Company's Board of Directors did not declare a cash dividend
on common stock for the first quarter of 1999. The payment of
dividends is subject to the results of the Company's operations,
existing debt covenants and declaration by the Company's Board of
Directors. As long as the Company is unable to make restricted
payments, as noted above, it will not be able to declare dividends.

OTHER
-----
     The Company is exposed to various market risks, including
changes in certain commodity prices and interest rates. To manage the
volatility relating to these normal business exposures, the Company
periodically uses commodity futures and options contracts to reduce
price volatility, to fix margins in its refining and marketing
operations and to protect against price declines associated with its
crude oil and finished products inventories. 

     During the quarter ended March 31, 1999, the Company entered
into several related transactions for the purchase and sale of
various put and call option contracts expiring in August 1999, the
purpose of which was to protect 700,000 barrels of crude oil
inventories from the risk associated with declines in crude oil
prices. For the quarter ended March 31, 1999, the Company recorded a
loss of approximately $1,444,000 related to these option contracts as
a result of crude oil price increases. This loss was offset by
reductions in lower of cost or market inventory reserves. In relation
to these contracts, at March 31, 1999, every increase of $1.00 in
crude oil prices will result in a loss of approximately $700,000 in
the value of the options. Subsequent to March 31, 1999, the Company
undertook actions to reduce its exposure to further losses associated
with the outstanding options in the event that crude oil prices
continue to rise. The potential loss from a hypothetical 10% adverse
change in commodity prices on other open commodity futures and
options contracts held by the Company at March 31, 1999, would not
materially affect the Company's consolidated financial condition and
results of operations. 

     Additionally, the Company has a $65,000,000 Credit Agreement
that is floating-rate debt tied to various short-term indices. As a
result, the Company's annual interest costs associated with this debt
will fluctuate. At March 31, 1999, there were no direct borrowings
outstanding under this Credit Agreement. 

     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 other 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.

     The Company, and several other entities, have received a notice
of intent to file suit from the New Mexico Office of the Natural
Resources Trustee (the "ONRT") for the recovery of $260,000,000 in
alleged damages to natural resources, including alleged damages to
ground water, surface water and soil. The ONRT may revise its damage
estimate after a damage assessment is completed. The notice relates
to the South Valley CERCLA Superfund site in Albuquerque, New Mexico.
The site allegedly includes contamination that originated from a GE
Aircraft Engines/U.S. Air Force facility, as well as contamination
that allegedly originated from a petroleum products terminal that was
acquired by the Company in 1995 (the "Albuquerque Terminal").
Potentially responsible party liability is joint and several, such
that a responsible party may be liable for all natural resources
damages at a site even though it was responsible for only a small
part of such damages. At the time of purchase by the Company, Texaco
Refining and Marketing Inc. ("Texaco") agreed to defend, indemnify,
reimburse and hold the Company harmless from and against all claims
and damages arising from, or caused by, pre-closing contamination.
Texaco has acknowledged its obligation under this agreement, subject
to any evidence that the ONRT intends to assess damages for any
releases resulting from the Company's operations. The Company
believes that any natural resources damages associated with the South
Valley Superfund site relate to releases that predate the Company's
acquisition of the Albuquerque Terminal and, accordingly, does not
believe that it needs to record a liability in connection with this
matter.

     In May 1991, the Environmental Protection Agency ("EPA")
notified the Company 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")
CERCLA Superfund site. The Landfill is adjacent to the Company's
inactive Farmington refinery. This refinery was operated until 1982.
Although a final plan of action for the Superfund site has not yet
been adopted by the Bureau of Land Management (the "BLM"), the owner
of the Landfill, BLM developed a proposed plan of action in 1996,
which it projected would 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, BLM is
proposing to take additional remedial actions with an estimated cost
of approximately $1,800,000.

     In 1989, a consultant to the Company estimated, based on various
assumptions, that the Company's share of potential liability could be
approximately $1,200,000. This figure was based upon estimated
Landfill remediation costs significantly higher than those being
proposed by BLM. The figure was also based on the consultant's
evaluation of such factors as available clean-up technology, BLM's
involvement at the site and the number of other entities that may
have had involvement at the site, but did not include an analysis of
all of the Company's potential legal defenses and arguments,
including possible setoff rights.

     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 the party was responsible for only a
small part of such costs. Although it is possible that the Company
may ultimately incur liability for clean-up costs associated with the
Landfill, a reasonable estimate of the amount of this liability, if
any, cannot be made at this time because, among other reasons, the
final site remedy has not been selected, a number of entities had
involvement at the site, allocation of responsibility among
potentially responsible parties has not yet been made, and
potentially-applicable factual and legal issues have not been
resolved. Based on current information, the Company does not believe
that it needs to record a liability in relation to BLM's proposed
plan.

     The Company is undertaking an investigation into potential lead
contamination at a 5.5 acre site that the Company owns in Bloomfield,
New Mexico. The investigation arises out of the removal of a 55,000
barrel crude oil storage tank by a contractor. The Company has
completed a survey that indicates that lead levels in the soil at
this site are below Environmental Protection Agency cleanup levels
for industrial and residential sites. The Company has submitted this
report to the New Mexico Energy, Minerals and Natural Resources
Department ("EMNRD"). Based upon the results of the survey, the
Company believes that it is unlikely that the EMNRD will require the
Company to undertake lead cleanup activities at the site.

     The Company has an environmental liability accrual of
approximately $2,700,000. Approximately $800,000 relates to ongoing
environmental projects, including the remediation of a hydrocarbon
plume that appears to extend no more than 1,800 feet south of the
inactive Farmington refinery and hydrocarbon contamination on and
adjacent to 5.5 acres the Company owns in Bloomfield, New Mexico. The
remaining $1,900,000 relates to an originally estimated liability of
approximately $2,300,000, recorded in the second quarter of 1996, for
certain environmental obligations assumed in the acquisition of the
Bloomfield refinery. That amount was recorded as an adjustment to the
purchase price and allocated to the assets acquired. This
environmental accrual is recorded in the current and long-term
sections of the Company's Consolidated Balance Sheets.

     The Company is subject to audit on an ongoing basis of the
various taxes that it pays to federal, state, local and tribal
agencies. These audits may result in assessments or refunds along
with interest and penalties. In some cases the jurisdictional basis
of the taxing authority is in dispute and is the subject of
litigation or administrative appeals. The Company has received
several tax notifications and assessments from the Navajo Tribe
relating to Company operations 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 in
connection with crude oil removed from properties located within this
area. The Company has invoked its appeal rights with the Tribe's Tax
Commission in connection with this assessment and intends to oppose
the assessment. In November 1998, the Company received a notice of
proposed assessment from the Navajo Tribe for an additional
$2,100,000 involving severance tax issues similar to those raised in
connection with the $1,800,000 assessment. The Company has responded
to the notice of proposed assessment and intends to oppose any final
assessment issued by the Navajo Tribe in connection with the area of
disputed jurisdiction. Although it is probable that the Company will
incur liability in connection with tax notifications and assessments
from the Navajo Tribe relating to the area of disputed jurisdiction,
it is not possible to reasonably estimate the amount of any
obligation for such taxes at this time because the Navajo Tribe's
authority to impose taxes throughout this area has not been legally
established and all potentially-applicable factual issues have not
been resolved. The Company has accrued a liability for assessments
that it has received from the Navajo Tribe for substantially less
than the amount of the assessments. 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. The Company may potentially be able to request
reimbursement from third party oil lease interest owners in
connection with any severance tax amounts ultimately paid by the
Company that relate to purchases from them.

     The Company believes that there has been a temporary reduction
in field maintenance work and drilling activity in the Four Corners
area because of recent low crude oil prices, which has resulted in a
decline in local crude oil production. Based upon history and
discussions with local producers, the Company believes that
production will increase as crude oil prices recover. Company
projections of local supply availability from the field, which take
into account current crude oil prices, indicate that the Company's
refining feedstock needs may exceed the supply of crude oil and other
feedstocks that will be available from local sources until crude oil
production recovers. The Company expects to purchase approximately
200,000 barrels of an existing inventory of Alaska North Slope
("ANS") crude oil in the second quarter of 1999 that is available in
the Four Corners area. The Company believes that any temporary
shortfall in local supply can be supplied from other sources and
transported to the Four Corners area by pipeline or other
transportation means. Generally, feedstocks originating from outside
of the Four Corners area are of lesser quality than locally available
feedstocks, and the Company believes such feedstocks generally have a
delivered cost greater than that of locally available feedstocks. 

     The Company continues to evaluate supplemental feedstock
alternatives for its refineries on both a short-term and long-term
basis. Whether or not any shortfall in local supply is ultimately
supplied from other sources depends on a number of factors. These
factors include, but are not limited to, the cost involved, the
quantities required, the demand for finished products, the selling
prices of finished products and other actions the Company might take,
such as decreasing production runs. There is no assurance that
current or projected levels of supply will be maintained, or that any
supplemental feedstock alternatives will be economical or capable of
implementation as some alternatives require the consent or
cooperation of third parties and other considerations beyond the
control of the Company. Any significant long-term interruption in
crude oil supply, due to prices or other factors, or any significant
long-term interruption of crude oil transportation systems, would
have an adverse effect on the Company's operations.

     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 is the
sale and possible conversion and extension of the existing Texas-New
Mexico crude oil pipeline to transport refined products from West
Texas to New Mexico, including Albuquerque and Bloomfield, and
ultimately to Salt Lake City, Utah. Separately, an existing natural
gas liquids ("NGL") pipeline is in the process of being converted to
a refined products pipeline that will be capable of delivering
finished product from Southeastern New Mexico to the Albuquerque and
Four Corners areas. This conversion is reportedly scheduled for
completion in 1999. 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 and the Phoenix and Tucson, Arizona markets to the
West. 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 Company does not presently manufacture gasolines that
satisfy Arizona cleaner burning gasoline ("CBG") specifications. The
specifications are currently applicable to gasolines sold or used in
Maricopa County and a portion of Yavapai County, and are expected to
become effective in Pinal County by 2001. The Company operates
approximately 20 service stations in these areas, and also conducts
wholesale marketing operations there. The Company currently does not
intend to make the changes necessary to produce CBG because the
capital costs associated with manufacturing large quantities of such
gasolines would be significant in amounts not yet determined by the
Company. The Company has the ability to purchase or exchange for
these gasolines to supply its operations in the CBG areas, including
Pinal County. It is possible that additional legislation or
regulations affecting motor fuel specifications may be adopted that
would impact geographic areas in which the Company markets its
products.

     In 1997, the Company outlined a program for Year 2000 ("Y2K")
compliance. The Y2K issue is the result of certain computer systems
using a two-digit format rather than four digits to define the
applicable year. Such computer systems may be unable to properly
interpret dates beyond the year 1999, which could lead to system
failure or miscalculations causing disruptions of operations. The
Company has identified three major areas determined to be critical
for successful Y2K compliance: (1) financial and information system
applications, (2) manufacturing and process applications, including
embedded chips, and (3) business relationships.

     The Company has hired an outside consultant to act as its Year
2000 project manager. This consultant is directing the Company's
efforts in identifying and resolving Y2K issues pursuant to a five-
phase program for Year 2000 compliance. The five phases are as
follows:

     (1)  AWARENESS PHASE. This phase included the development of a
Project Management Plan to make the Company aware of the Y2K problem,
identify potential Y2K issues in all areas of the Company and develop
a plan of action to resolve these issues. This phase was completed in
July 1998.

     (2)  ASSESSMENT PHASE. Completed in October 1998, this phase
included generating a complete inventory of all software, hardware,
processing equipment and embedded chips throughout the entire
organization and identifying those items that were Y2K compliant and
those that were not.

     (3)  RENOVATION (REMEDY) PHASE. In this phase, strategies have
been and will be developed for each item inventoried during the
assessment phase to determine whether remedial action is required
and, if so, whether the item should be eliminated, replaced, or
updated. This phase will also include the determination of priorities
and scheduling, including contingency plans for all critical items.
This phase was substantially completed in February 1999 except for
Phoenix Fuel and the Company's retail operations, which are scheduled
for completion in June 1999.

     (4)  VALIDATION (TESTING) PHASE. In this phase, a test plan is
developed and implemented to validate the remedies selected in the
previous phase. Although originally scheduled for completion by March
1999, the Company now believes that this phase will be completed in
June 1999.

     (5)  IMPLEMENTATION PHASE. This phase involves the use of the
Y2K compliant inventory, development and implementation of additional
plans to avoid Y2K problems and the development and finalizing of
contingency plans. Although originally scheduled for completion by
March 1999, the Company now believes completion of this phase will be
in August 1999.

     At the present time, approximately 1,500 items have been
inventoried consisting of software, hardware, processing equipment
and embedded chips. Of these inventoried items, 76% are Y2K
compliant, 20% are not compliant and fall into the renovation phase,
and 4% are of unknown status or are still being evaluated. The
Company believes that none of the items with unknown status and none
of those items that are still being evaluated, are critical to the
operations of the Company's business. All software, hardware,
processing equipment and embedded chips are being prioritized based
on critical business functions and the most critical will be
scheduled for validation testing and implementation first. 

     In the financial and information system area, the Company's core
financial systems are not Y2K compliant, and the Company has begun a
program of remediation and replacement utilizing an outside
consultant as well as internal staff. In addition to its core
financial systems, certain subsidiary financial systems and other
information systems will require replacement or renovation. 

     Utilizing both internal staff and outside consultants, the
remediation and replacement program for the core financial systems
was substantially completed in April 1999. To date, 100% of the
targeted core financial and other related applications have been
renovated, and are in the process of being tested. Depending on the
results of the testing, some additional modifications may be
required. The Company believes that all critical issues have been
identified in the financial and information system area, and that
resources are available to bring these systems into compliance by the
scheduled completion date. 

     In the manufacturing and process area, the Company has completed
an inventory of the software and hardware at all locations (including
embedded chips, such as process controllers and chromatographs) and
remediation is currently in process. In this area, 85% of the
processes are compliant, 10% are being renovated and 5% have been
scheduled for renovation. The Company believes that all critical
issues have been identified in the manufacturing and process area and
that resources are available to bring these systems into compliance.
Although originally scheduled for completion by April 1999, the
Company now believes completion of this phase will be in August 1999.

     In the business relationship area, the Company continues to
correspond with its business partners in order to identify and
resolve Y2K issues that may have an impact on operations. The Company
has sent compliance questionnaires to over 1,400 business partners,
250 of which have been determined to be critical. The Company
continues to follow up with those who have not responded. The
critical business partners identified by the Company include, among
others, utilities, pipeline companies, terminals, crude oil and other
raw material suppliers, certain key customers, financial
institutions, insurance companies and employee benefit plan
administrators. To date, the Company has received 526 responses to
its compliance questionnaires representing approximately 38% of all
questionnaires sent. The Company has received responses from 58% of
those business partners identified as being critical. The Company has
not identified any significant problems relating to the responses it
has received and analyzed to date. 

     Remediation of the Y2K items identified by the Company is being
accomplished using both internal and external manpower. The Company
estimates that the total cost of the Y2K project will be between
$600,000 and $800,000. Through March 31, 1999, the Company had
expended approximately $470,000. The Company expects to fund its Y2K
expenditures from operating cash flows and short-term borrowings if
necessary. The total cost associated with required modifications to
become Year 2000 compliant is not expected to be significant to the
Company's financial position or results of operations. 

     Contingency plans are in the process of being prepared for all
of the Company's critical business processes in order to minimize any
disruptions in these operations, allowing the Company to continue to
function on January 1, 2000 and beyond. These plans are being
developed to mitigate both internal risks as well as potential risks
in the chain of the Company's suppliers and customers. The Company
believes that the contingency planning process will be an ongoing one
which will require modifications as the Company obtains additional
information from its remediation and testing phases and about the
status of third party Y2K readiness. Contingency plans are in various
stages of completion and include such items as increasing certain of
the Company's inventories, placing certain processing equipment in
manual override mode if needed, establishing Y2K emergency response
teams, and developing other emergency procedures in the event
problems do arise. Although originally scheduled for completion in
March 1999, the Company continues to develop these plans for all of
its business units as it completes the renovation, validation and
implementation phases of its Y2K compliance project and will review
and revise them throughout the year.

     The Company continues to assess its most reasonably likely worst
case Y2K scenario. It is the Company's belief that the greatest
potential risk from the Y2K issue could be the inability of principal
suppliers to be Y2K ready. This could result in delays in product
deliveries from such suppliers and disruption of the distribution
channel, including oil pipelines, transportation vendors and the
Company's own distribution centers. Another significant potential
risk is the general failure of systems and necessary infrastructure
such as electricity supply. Contingency plans will be developed to
address these scenarios.

     The Company believes that completed and planned modifications
and replacements of its internal systems and equipment will allow it
to be Y2K compliant in a timely manner. Due to the widespread nature
of potential Y2K issues, however, there can be no assurance that all
of the Company's Y2K issues will be identified and resolved in a
timely manner, or that contingency plans will mitigate the effects of
any noncompliance. In addition, there can be no assurance that third
parties upon which the Company relies will be Y2K compliant in a
timely manner or that the third parties' contingency plans will
mitigate the effects of any noncompliance. Any significant long-term
disruptions to the Company's business caused by noncompliance could
have a material adverse effect on the Company's financial position
and results of operations.

     "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
impact of the mandated use of gasolines satisfying governmentally
mandated specifications on the Company's operations; the availability
of indemnification from third parties; the expansion of the Company's
refining and retail operations through acquisition and construction;
the adequacy of the Company's environmental and tax reserves; the
Company's ability to recover tax payments from third parties; the
adequacy and cost 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 purchase ANS
crude oil in the second quarter of 1999; the ability of the Company
to use the net proceeds from the FFCA transaction to invest in
capital assets or to reduce senior indebtedness within prescribed
time periods; the likelihood that the EMNRD will require the Company
to undertake lead cleanup activities at the 5.5 acre site that the
Company owns in Bloomfield, New Mexico; the estimated cost of and
ability of the Company or third parties on which it relies to become
Y2K compliant; risks associated with certain covenants relating to
its 9 3/4% Notes; the potential losses, if any, from open August 1999
crude oil call option contracts and other risks detailed from time to
time in the Company's filings with the Securities and Exchange
Commission.


<PAGE>
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information required by this item is incorporated by
reference to the section entitled "Other" in the Company's
Management's Discussion and Analysis of Financial Condition and
Results of Operations in Part I, Item 2.
<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 6 to the Unaudited Condensed
Consolidated Financial Statements set forth in Item 1, Part I hereof
and the discussion of certain contingencies contained in Item 2, Part
I hereof, 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 6, 1999.
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.

     Anthony J. Bernitsky was elected as a director of the Company. 
The vote was as follows:

         SHARES VOTED       SHARES VOTED
            "FOR"           "WITHHOLDING" 
         ------------       -------------
           8,324,153            49,559

     F. Michael Geddes was elected as a director of the Company.  The
vote was as follows: 

         SHARES VOTED       SHARES VOTED
            "FOR"           "WITHHOLDING"
         ------------       -------------
           8,345,060            28,652

     Deloitte & Touche LLP were ratified as independent auditors for
the Company for the year ending December 31, 1999.  The vote was as
follows:

         SHARES VOTED       SHARES VOTED        SHARES VOTED
            "FOR"            "AGAINST"          "ABSTAINING"
         ------------       ------------        -------------
           8,348,650            15,959              9,103

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibit:

     27   - Financial Data Schedule.

(b)  Reports on Form 8-K. Report on Form 8-K for the date December
     31, 1998, filed January 29, 1999, with respect to the completion
     of a sale-leaseback transaction between the Company and
     Franchise Finance Corporation of America involving eighty-three
     of the Company's service station/convenience stores.<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, 1999 to be signed on its behalf by the
undersigned thereunto duly authorized.

                         GIANT INDUSTRIES, INC.


                         /s/ GARY R. DALKE
                         --------------------------------------------
                         Gary R. Dalke, Vice President,
                         Controller, Accounting Officer
                         and Assistant Secretary


Date: May 14, 1999