<PAGE>   1
                                    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 Period Ended May 31, 1998

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

For the transition period from                       to
                               ---------------------    ----------------------

                          Commission File No. 333-35083

                             UNITED REFINING COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Pennsylvania                                  25-1411751
-------------------------------                   -------------------
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                    Identification No.)

     15 Bradley Street
   Warren, Pennsylvania                                 16365
  ---------------------                                 -----
  (address of principal                               (Zip Code)
   executive office)

Registrant's telephone number, including area code        814-726-4674

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      No X
                                    ---     ---

Number of shares outstanding of Registrant's Common Stock as of July 15, 1998:
100.



                                       1

<PAGE>   2



<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                             TABLE OF ADDITIONAL REGISTRANTS
---------------------------------------------------------------------------------------------------------------------------
                                                                Primary Standard
                                        State of Other             Industrial          IRS Employer
                                        Jurisdiction of          Classification       Identification     Commission File
               Name                      Incorporation               Number               Number              Number
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
<S>                                       <C>                        <C>               <C>                <C> 
Kiantone Pipeline Corporation              New York                   4612              25-1211902         333-35083-01
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Kiantone Pipeline Company                Pennsylvania                 4600              25-1416278         333-35083-03
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
United Refining Company of               Pennsylvania                 5541              25-0850960         333-35083-02
Pennsylvania
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
United Jet Center, Inc.                    Delaware                   4500              52-1623169         333-35083-06
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Kwik-Fill, Inc.                          Pennsylvania                 5541              25-1525543         333-35083-05
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Independent Gas and Oil Company            New York                   5170              06-1217388         333-35083-11
of Rochester, Inc.
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Bell Oil Corp.                             Michigan                   5541              38-1884781         333-35083-07
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
PPC, Inc.                                    Ohio                     5541              31-0821706         333-35083-08
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Super Test Petroleum, Inc.                 Michigan                   5541              38-1901439         333-35083-09
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Kwik-Fil, Inc.                             New York                   5541              25-1525615         333-35083-04
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
Vulcan Asphalt Refining                    Delaware                   2911              23-2486891         333-35083-10
Corporation
----------------------------------- ------------------------ ----------------------- ------------------ -------------------
</TABLE>





                                       2

<PAGE>   3



                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES


                                      INDEX

--------------------------------------------------------------------------------

PART 1.    FINANCIAL INFORMATION                                   PAGE(S)

Item 1.    Financial Statements

           Consolidated Balance Sheets -
           May 31, 1998 and August 31, 1997                           4

           Consolidated Statements of Operations -
           Nine Months and Quarters Ended May 31, 1998 and 1997       5

           Consolidated Statements of Cash Flows -
           Nine Months Ended May 31, 1998 and 1997                    6

           Notes to Consolidated Financial Statements                 7

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations           8-12

PART II.   OTHER INFORMATION                                         13





                                       3
<PAGE>   4





PART 1 -- FINANCIAL INFORMATION

      ITEM 1.  FINANCIAL STATEMENTS

                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                                 MAY 31, 1998     AUGUST 31,
                                                                                 (UNAUDITED)         1997
------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>          <C>     
ASSETS
CURRENT:
    Cash and cash equivalents                                                        $  5,695     $ 11,024
    Accounts receivable, net                                                           27,701       29,762
    Inventories                                                                        61,143       67,096
    Prepaid expenses and other assets                                                   5,839        6,786
    Deferred income taxes                                                                 703          712
------------------------------------------------------------------------------------------------------------
           TOTAL CURRENT ASSETS                                                       101,081      115,380
------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT:
    Cost                                                                              257,096      234,956
    Less:  accumulated depreciation                                                    67,381       60,757
------------------------------------------------------------------------------------------------------------
           NET PROPERTY, PLANT AND EQUIPMENT                                          189,715      174,199
------------------------------------------------------------------------------------------------------------
RESTRICTED CASH AND CASH EQUIVALENTS AND INVESTMENTS                                   29,400       48,168
DEFERRED FINANCING COSTS                                                                7,442        7,807
OTHER ASSETS                                                                              856          838
------------------------------------------------------------------------------------------------------------
                                                                                     $328,494     $346,392
------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT:
    Revolving credit facility                                                        $ 12,000     $     --
    Current installments of long-term debt                                                301          218
    Accounts payable                                                                   15,738       29,010
    Accrued liabilities                                                                18,204       13,753
    Sales, use and fuel taxes payable                                                  13,502       13,056
------------------------------------------------------------------------------------------------------------
           TOTAL CURRENT LIABILITIES                                                   59,745       56,037
------------------------------------------------------------------------------------------------------------
LONG TERM DEBT:  LESS CURRENT INSTALLMENTS                                            200,963      201,054
DEFERRED INCOME TAXES                                                                   8,808       17,390
DEFERRED GAIN ON SETTLEMENT OF PENSION PLAN OBLIGATIONS                                 2,259        2,420
DEFERRED RETIREMENT BENEFITS                                                           12,169       10,797
OTHER NONCURRENT LIABILITIES                                                            2,759        5,757
------------------------------------------------------------------------------------------------------------
           TOTAL LIABILITIES                                                          286,703      293,455
------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
    Common stock, $.10 par value per share - shares authorized 100; issued
           and outstanding 100                                                             --           --
    Additional paid-in capital                                                          7,150        7,150
    Retained earnings                                                                  34,641       45,787
------------------------------------------------------------------------------------------------------------
           TOTAL STOCKHOLDER'S EQUITY                                                  41,791       52,937
------------------------------------------------------------------------------------------------------------
                                                                                     $328,494     $346,392
------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.




                                       4
<PAGE>   5






                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS -- UNAUDITED
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                               THREE MONTHS ENDED                       NINE MONTHS ENDED
                                                                     MAY 31,                                 MAY 31,
                                                           ---------------------------------------------------------------------
                                                             1998                 1997               1998               1997
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>                 <C>                 <C>      
NET SALES                                                 $ 175,246           $ 203,644           $ 551,811           $ 638,720
COST OF GOODS SOLD                                          152,541             179,229             492,976             571,238
--------------------------------------------------------------------------------------------------------------------------------
         GROSS PROFIT                                        22,705              24,415              58,835              67,482
--------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
    Selling, general and administrative expenses             19,186              17,945              56,479              53,186
    Depreciation and amortization expenses                    2,273               2,134               6,820               6,399
--------------------------------------------------------------------------------------------------------------------------------
         TOTAL OPERATING EXPENSES                            21,459              20,079              63,299              59,585
--------------------------------------------------------------------------------------------------------------------------------
         OPERATING INCOME (LOSS)                              1,246               4,336              (4,464)              7,897
--------------------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
    Interest income                                             560                 262               2,274                 897
    Interest expense                                         (5,649)             (3,965)            (16,665)            (12,113)
    Other, net                                                    1                  60                 285                 (74)
--------------------------------------------------------------------------------------------------------------------------------
                                                             (5,088)             (3,643)            (14,106)            (11,290)
--------------------------------------------------------------------------------------------------------------------------------
         INCOME (LOSS) BEFORE INCOME TAX
            EXPENSE (BENEFIT)                                (3,842)                693             (18,570)             (3,393)
INCOME TAX EXPENSE (BENEFIT)                                 (1,528)                322              (7,424)             (1,284)
--------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                                         $  (2,314)          $     371           $ (11,146)          $  (2,109)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       5
<PAGE>   6



                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF CASH FLOWS -- (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                                                   NINE MONTHS ENDED
                                                                                        MAY 31,
                                                                           -----------------------------
                                                                                  1998            1997
--------------------------------------------------------------------------------------------------------
<S>                                                                            <C>             <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                  $(11,146)       $ (2,109)
     Adjustments to reconcile net loss to net
                 cash used in operating activities:
                Depreciation and amortization                                     7,295           6,566
                Post-retirement benefits                                          1,372           1,701
                Change in deferred income taxes                                  (8,582)             86
                (Gain) loss on asset dispositions                                    33            (121)
                Cash used in working capital items                               (2,300)         (7,610)
                Other, net                                                         (121)           (224)
--------------------------------------------------------------------------------------------------------
                   TOTAL ADJUSTMENTS                                             (2,303)            398
--------------------------------------------------------------------------------------------------------
                   NET CASH USED IN OPERATING ACTIVITIES                        (13,449)         (1,711)
--------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property, plant and equipment                                 (22,917)         (3,127)
     Proceeds from asset dispositions                                               560             124
     Net cash provided by restricted cash, cash equivalents
                and investments                                                  18,768              --
--------------------------------------------------------------------------------------------------------
                   NET CASH USED IN INVESTING ACTIVITIES                         (3,589)         (3,003)
--------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings on revolving credit facility                                 12,000          14,500
     Proceeds from issuance of long term debt                                       156              --
     Principal reductions of long-term debt                                        (164)        (16,689)
     Deferred financing costs                                                      (283)           (568)
--------------------------------------------------------------------------------------------------------
                   NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES           11,709          (2,757)
--------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                        (5,329)         (7,471)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   11,024          15,511
--------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $  5,695        $  8,040
--------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) WORKING CAPITAL ITEMS:
     Accounts receivable, net                                                  $  2,061        $  4,020
     Inventories                                                                  5,953         (17,401)
     Prepaid expenses and other assets                                              956          (3,570)
     Accounts payable                                                           (13,272)          5,149
     Accrued liabilities                                                          1,556           4,755
     Sales, use and fuel taxes payable                                              446            (563)
--------------------------------------------------------------------------------------------------------
                TOTAL CHANGE                                                   $ (2,300)       $ (7,610)
--------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.




                                       6
<PAGE>   7




                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

--------------------------------------------------------------------------------

1. BASIS OF PRESENTATION

The accompanying unaudited 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
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of only normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three and nine month periods ended
May 31, 1998 are not necessarily indicative of the results that may be expected
for the year ending August 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto incorporated by
reference in the Company's Form 10-K filing dated November 28, 1997.


2. CREDIT FACILITY

The Company's revolving credit facility contains certain covenants which provide
for the maintenance of a minimum net worth and fixed charges. As of May 31,
1998, the Company was not in compliance with the minimum fixed charge ratio
contained in its revolving credit agreement. The Company has received a waiver
from the banks for this period.

3. SUBSIDIARY GUARANTORS

Summarized financial information for the Company's wholly owned subsidiary
guarantors are as follows:

<TABLE>
<CAPTION>
                                             MAY 31, 1998
                                              (UNAUDITED)        AUGUST 31, 1997
---------------------------------------------------------------------------------
<S>                                             <C>                  <C>    
Current assets                                  $36,220              $35,653
Noncurrent assets                                67,953               60,131
Current liabilities                              97,399               82,131
Noncurrent liabilities                            7,645               10,474
---------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                     NINE MONTHS ENDED
                                             MAY 31, 1998         MAY 31, 1997
                                              (UNAUDITED)          (UNAUDITED)
-------------------------------------------------------------------------------
<S>                                            <C>                  <C>     
Net sales                                      $326,502             $346,482
Gross profit                                     47,770               50,328
Operating income (loss)                          (3,326)               3,630
Net income (loss)                                (3,939)                 887
-------------------------------------------------------------------------------
</TABLE>




                                       7
<PAGE>   8




                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (UNAUDITED)

--------------------------------------------------------------------------------

Recent Developments

         On May 19, 1998 the Company resumed refinery crude oil processing after
a scheduled shutdown of the crude distillation unit and certain other refinery
processing units for maintenance and upgrading. This shutdown was completed in
22 days, one day ahead of schedule. Upgrades installed during this shutdown will
improve refinery yields, reduce refinery energy consumption, and reduce refinery
emissions. Additional improvements, including those designed to increase
refinery capacity, will be installed following receipt of necessary permits. The
Company has tentatively scheduled an abbreviated crude distillation unit
shutdown in the spring of 1999 for installation of these improvements.

Results of Operations

         For the nine months ended May 31, 1998, the Company's Cost of Goods
Sold, Gross Profit and Operating Income were negatively affected by the
reduction in the valuation of working inventories as a result of falling
petroleum prices, although these changes in valuation did not have a material
effect on the Company's operating cash flow. Most of the reduction in the
Company's inventory valuation occurred in the fiscal quarter ended February 28,
1998, and was reported in the Company's filings with the Securities and Exchange
Commission for that quarter. Subsequent to these filings, several other
companies engaged in petroleum refining and marketing reported similar negative
impacts of reductions in inventory valuation on their earnings.

         Matters discussed below should be read in conjunction with the
accompanying unaudited financial information. Certain statements contained in
this report are forward-looking. Although management believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge of its business and operations, there can be no assurance that actual
results will not differ materially from its expectations. Factors that could
cause actual results to differ from expectations include general economic,
business and market conditions, volatility of gasoline prices, merchandise
margins, customer traffic, weather conditions, labor costs and the level of
capital expenditures. For other important factors that may cause actual results
to differ materially from expectations and underlying assumptions, see the
Company's periodic filings with the Securities and Exchange Commission.

         Comparison of the Fiscal Quarters ended May 31, 1998 and May 31, 1997

         Net Sales. Net sales decreased $28.4 million or 13.9% from $203.6
million for the fiscal quarter ended May 31, 1997 to $175.2 million for the
fiscal quarter ended May 31, 1998. The decline was due to 24.2% and 23.6%
decreases in wholesale and retail petroleum sales prices respectively, partially
offset by a 5.0% increase in retail petroleum volume and a 12.3% increase in
retail merchandise sales. Wholesale sales volume increased slightly, despite a
22 day scheduled refinery maintenance shutdown, as inventory built in
preparation for the shutdown offset the reduction in refinery production and
maintained availability of product for wholesale customers. The price decreases
were primarily due to lower prices for petroleum products worldwide which
accompanied a 26.0% decrease in world crude oil prices, as indicated by prices
of NYMEX crude oil contracts.




                                       8
<PAGE>   9

                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (UNAUDITED)

--------------------------------------------------------------------------------


         Cost of Goods Sold. Cost of goods sold decreased $26.7 million or 14.9%
from $179.2 million for the fiscal quarter ended May 31, 1997 to $152.5 million
for the fiscal quarter ended May 31, 1998. This decrease was primarily due to a
26.0% decline in world crude oil prices for the quarter ended May 31, 1998 as
compared to crude oil prices for the quarter ended May 31, 1997. The decline in
the Company's cost of goods due to lower world crude oil prices was partially
offset by increased purchases of intermediate feedstocks and of finished
products for resale in order to supply product demand during the 22 day
maintenance shutdown. Lower crude oil prices were also partially offset by the
cost of supplying the increased sales volume.

         Operating Expenses. Operating expenses increased $1.4 million or 6.9%
from $20.1 million for the fiscal quarter ended May 31, 1997 to $21.5 million
for the fiscal quarter ended May 31, 1998. The increase was primarily due to
increased retail expenses for sales promotions, retail station wages and
maintenance and environmental expenses, and to increased professional and
consulting fees. Increased retail station wages were primarily due to an
increase in the federal minimum wage, while increased retail environmental
expenses were primarily connected with the upgrading of underground storage
tanks to new federal standards and will be partially recovered through future
reimbursement received from indemnification funds from the states of Ohio and
Pennsylvania. Increased retail promotion expenses were primarily in connection
with a "frequent fueler" program which has been effective in increasing retail
gasoline volume.

         Operating Income. Operating income decreased $3.1 million from $4.3
million for the fiscal quarter ended May 31, 1997 to $1.2 million for the fiscal
quarter ended May 31, 1998. This was primarily due to lower retail gross profit,
both in terms of total dollars and as percentage of sales. This was the result
of lower per gallon retail petroleum margins, only partially offset by higher
sales volumes and improved retail merchandise margins. Refining gross profit
improved both in terms of total dollars and as percentage of sales, as lower
crude oil costs more than offset reduced production due to a scheduled May 1998
shutdown for maintenance and upgrading. Overall gross profit improved in terms
of percentage of sales, despite the decline in total dollar terms.

         Interest Expense. Net interest expense (interest expense less interest
income) increased $1.4 million from $3.7 million for the fiscal quarter ended
May 31, 1997 to $5.1 million for the fiscal quarter ended May 31, 1998. The
increase was primarily due to an increase in the amount of long-term debt
outstanding following the Company's sale of $200 million of Senior Unsecured
Notes in June 1997. This was partially offset by a reduction in the average
interest rate for long-term debt outstanding and interest income received on
restricted cash and investments.

         Income Taxes. The provisions for income taxes for the fiscal quarters
ended May 31, 1997 and May 31, 1998 have been computed based upon management's
estimate of its annualized effective tax rate of approximately 46.5% and 39.8%
respectively.

         Comparison of the Nine Months ended May 31, 1998 and May 31, 1997

         Net Sales. Net sales decreased $86.9 million or 13.6% from $638.7
million for the nine months ended May 31, 1997 to $551.8 million for the nine
months ended May 31, 1998. The decline was due to 18.3% and 16.1% decreases in
wholesale and retail petroleum sales prices, respectively and a 5.4% 




                                       9
<PAGE>   10


                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (UNAUDITED)

--------------------------------------------------------------------------------


decrease in wholesale petroleum volume, partially offset by a 10.2% increase in
retail merchandise sales and a 0.5% increase in retail petroleum volume. The
price decreases were primarily due to lower prices for petroleum products
worldwide which accompanied a 21.5% decrease in world crude oil prices, as
indicated by prices of NYMEX crude oil contracts. The reduction in wholesale
sales volumes was primarily the result of lower production due to the planned
shutdown of certain major refinery processing units for maintenance and
upgrading in October 1997 and May 1998.

         Cost of Goods Sold. Cost of goods sold decreased $78.3 million or 13.7%
from $571.2 million for the nine months ended May 31, 1997 to $493.0 million for
the nine months ended May 31, 1998. This decrease was primarily due to a 21.5%
decline in world crude oil prices for the nine months ended May 31, 1998 as
compared to crude oil prices for the nine months ended May 31, 1997. The decline
in the Company's cost of goods sold resulting from lower world crude oil prices
was partially offset by increased purchases of intermediate feedstocks and of
finished products for resale in order to supply product demand during the
maintenance shutdowns ended in October 1997 and May 1998. Also partially
offsetting lower crude oil prices were increases to cost of goods sold from
changes in inventory prices. The per barrel value of the Company's inventories
declined during the nine months ended May 31, 1998 as a result of declining
world petroleum prices during that nine months. The declining prices reduced the
value of Company's working inventories by approximately $8.9 million. These
reductions in inventory value contributed corresponding increases to cost of
goods sold. For the nine months ended May 31, 1997, the corresponding reduction
in working inventory value had increased cost of goods sold by approximately
$0.5 million. The Company maintains certain volumes of working inventory
necessary to support normal operations, and changes in valuation of this
inventory occur with fluctuations in world petroleum prices. The lower pricing
of the Company's working inventories on May 31, 1998, for example, was the
result of world petroleum prices which ended May approximately 22% below the
average for the Company's last five full fiscal years.

         Operating Expenses. Operating expenses increased $3.7 million or 6.2%
from $59.6 million for the nine months ended May 31, 1997 to $63.3 million for
the nine months ended May 31, 1998. The increase was primarily due to increased
retail expenses for sales promotions, retail station wages and maintenance and
environmental expense, and to increased professional and consulting fees.
Increased retail station wages were primarily due to an increase in the federal
minimum wage, while increased retail environmental expenses were primarily
connected with the upgrading of underground storage tanks to new federal
standards and will be partially recovered through future reimbursement received
from indemnification funds from the states of Ohio and Pennsylvania. Increased
retail promotions expenses were primarily in connection with a "frequent fueler"
program which has been effective in increasing retail gasoline volume.

         Operating Income. Operating income decreased $12.4 million from a $7.9
million operating income for the nine months ended May 31, 1997 to a $4.5
million operating loss for the nine months ended May 31, 1998. This was
primarily due to a decline in gross profit as the result of an $8.9 million
negative impact on cost of goods sold for changes in working inventory value.
Also contributing to the decline in gross profit and operating income was the
reduction in refinery production resulting from the scheduled maintenance
shutdowns in October 1997 and May 1998. Gross profit as a percentage of sales,
however, increased slightly, as increased refining margins and a $1.1 million
increase in retail merchandise gross profit partially offset the reduced
refinery production and the reduced inventory values.




                                       10
<PAGE>   11



                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (UNAUDITED)

--------------------------------------------------------------------------------


         Interest Expense. Net interest expense (interest expense less interest
income) increased $3.2 million from $11.2 million for the nine months ended May
31, 1997 to $14.4 million for the nine months ended May 31, 1998. The increase
was primarily due to an increase in the amount of long-term debt outstanding
following the Company's sale of $200 million of Senior Unsecured Notes in June
1997. This was partially offset by a reduction in the average interest rate for
long-term debt outstanding and interest income received on restricted cash and
investments.

         Income Taxes. The provisions for income taxes for the nine months ended
May 31, 1997 and May 31, 1998 have been computed based on management's estimate
of its annualized tax rate of approximately 37.8% and 40.0% respectively.

Liquidity and Capital Resources

         Working Capital (current assets minus current liabilities) at May 31,
1998 was $41.3 million and at August 31, 1997 was $59.3 million. The Company's
current ratio (current assets divided by current liabilities) was 1.7:1 at May
31, 1998 and was 2.1:1 at August 31, 1997.

         Net cash used in operating activities totaled $13.4 million for the
nine months ended May 31, 1998 compared to net cash used in operating activities
of $1.7 million for the nine months ended May 31, 1997. This decrease is
primarily a result of the net loss of $11.1 million and a decrease in accounts
payables, which was partially offset by decreases in accounts receivable and
inventories. Changes in the carrying value of the Company's inventory are the
result of fluctuations in world petroleum prices and do not have a material
effect on the Company's operating cash flow.

         Net cash used in investing activities for purchases of property, plant
and equipment totaled $22.9 million and $3.1 million for the nine months ended
May 31, 1998 and 1997, respectively. For the nine months ended May 31, 1998, the
Company used $18.8 million of restricted cash, cash equivalents and investments
to fund the Company's Capital Improvement Plan.

         Net cash provided by financing activities was $11.7 million for the
nine months ended May 31, 1998 compared to a use of $2.8 million for the nine
months ended May 31, 1997. The cash was provided by net borrowings on the
Company's revolving credit facility of $12 million. As of May 31, 1998, the
Company was in default of the minimum fixed charge ratio covenant. The bank has
granted the Company a waiver for this default.

         The Company reviews its capital expenditures on an ongoing basis. The
Company currently has budgeted approximately $28.2 million for capital
expenditures in fiscal 1998 with $3.3 million for completion of projects
relating to underground storage tanks. The remaining $24.9 million for fiscal
1998 is budgeted for the refinery expansion and retail capital improvement
program, refinery environmental compliance and routine maintenance. The refinery
expansion and retail capital improvement program is expected to be completed in
fiscal 1999 at a budgeted cost of approximately $13.8 million. An additional
$4.5 million has been budgeted for maintenance and non-discretionary capital
expenditures for fiscal 1999. Maintenance and non-discretionary capital
expenditures have averaged approximately $4 million annually over the last three
years for the refining and marketing operations.




                                       11
<PAGE>   12


                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (UNAUDITED)

--------------------------------------------------------------------------------



         Future liquidity, both short and long-term, will continue to be
primarily dependent on realizing a refinery margin sufficient to cover fixed and
variable expenses, including planned capital expenditures. The Company expects
to be able to meet its working capital, capital expenditure and debt service
requirements out of cash flow from operations, cash on hand and borrowings under
the Company's bank credit facility with PNC Bank. Although the Company is not
aware of any pending circumstances which would change its expectation, changes
in the tax laws, the imposition of and changes in federal and state clean air
and clean fuel requirements and other changes in environmental laws and
regulations may also increase future capital expenditure levels. Future capital
expenditures are also subject to business conditions affecting the industry. The
Company continues to investigate strategic acquisitions and capital improvements
to its existing facilities.

         Federal, state and local laws and regulations relating to the
environment affect nearly all 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. Future expenditures related to environmental matters cannot be
reasonably quantified in many circumstances due to uncertainties as to required
remediation methods and related clean-up cost estimates. The Company cannot
predict what additional 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 interpreted with respect to products or activities to
which they have not been previously applied.

Seasonal Factors

         Seasonal factors affecting the Company's business may cause variation
in the prices and margins of some of the Company's products. For example, demand
for gasoline tends to be highest in spring and summer months, while demand for
home heating oil and kerosene tends to be highest in the winter months. As a
result, the margin on gasoline prices versus crude oil costs generally tends to
increase in the spring and summer, while margins on home heating oil and
kerosene tend to increase in winter.

         Also, because winter weather in the Company's market is not favorable
for paving activity, the Company's asphalt sales in winter months are composed
of a much lower percentage of paving asphalt and a correspondingly higher
percentage of roofing asphalt whose demand is much less seasonal. In addition,
the Company stores a significant portion of winter asphalt production for sale
the following spring and summer.



                                       12
<PAGE>   13



                             UNITED REFINING COMPANY
                                AND SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (UNAUDITED)

--------------------------------------------------------------------------------


PART II - OTHER INFORMATION

Item 1.   Legal Proceedings
                      None

Item 2.   Changes in Securities
                      None

Item 3.   Defaults upon Senior Securities
                      None

Item 4.   Submission of Matters to a Vote of Security Holders
                      None

Item 5.   Other Information
                      None

Item 6.   Exhibits and Reports on Form 8K
                      (a) Exhibit 27 - Financial Data Schedule 
                      (b) No reports on Forms 8-K have been filed for quarter 
                          for which this report is being filed.




                                       13
<PAGE>   14




                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                        UNITED REFINING COMPANY
                                        --------------------------------
                                        (Registrant)



                                        /s/ Myron L. Turfitt
                                        --------------------------------
                                        Myron L. Turfitt
                                        President



                                        /s/ James E. Murphy
                                        --------------------------------
                                        James E. Murphy
                                        Chief Financial Officer





                                       14

<PAGE>   15



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                        KIANTONE PIPELINE CORPORATION
                                        --------------------------------
                                        (Registrant)



                                        /s/ Myron L. Turfitt
                                        --------------------------------
                                        Myron L. Turfitt
                                        President



                                        /s/ James E. Murphy
                                        --------------------------------
                                        James E. Murphy
                                        Chief Financial Officer




                                       15

<PAGE>   16



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     UNITED REFINING COMPANY OF PENNSYLVANIA
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer




                                       16

<PAGE>   17



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     KIANTONE PIPELINE COMPANY
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer





                                       17

<PAGE>   18



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     UNITED JET CENTER, INC.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer




                                       18


<PAGE>   19



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     KWIK-FILL, INC.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer




                                       19

<PAGE>   20



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998





                                     INDEPENDENT GASOLINE AND OIL COMPANY OF
                                     ROCHESTER, INC.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer




                                       20


<PAGE>   21



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     BELL OIL CORP.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer



                                       21


<PAGE>   22



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     PPC, INC.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer






                                       22
<PAGE>   23



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     SUPER TEST PETROLEUM, INC.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer




                                       23

<PAGE>   24



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     KWIK-FIL, INC.
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer





                                       24

<PAGE>   25



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date:  July 15, 1998






                                     VULCAN ASPHALT REFINING CORPORATION
                                     ----------------------------------------
                                     (Registrant)



                                     /s/ Myron L. Turfitt
                                     ----------------------------------------
                                     Myron L. Turfitt
                                     President



                                     /s/ James E. Murphy
                                     ----------------------------------------
                                     James E. Murphy
                                     Chief Financial Officer




                                       25