UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT


     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


         Date of Report (Date of earliest event reported): April 9, 1998



                              KANEB SERVICES, INC.
               (Exact name of registrant as specified in charter)



       Delaware                        1-5083                    74-1191271
(State of Incorporation)       (Commission File No.)          (I.R.S. Employer 
                                                             Identification No.)


       2435 North Central Expressway
       Richardson, Texas                                        75080
       (Address of Principal Executive Offices)              (Zip Code)

       Registrant's telephone number, including area code: (972) 699-4000





<PAGE>



Item 5.   Other Events.

         On April 9, 1998, the Board of Directors of Kaneb  Services,  Inc. (the
"Company")  declared a dividend  distribution of one Right for each  outstanding
share of Kaneb  Services,  Inc.  Common Stock to  stockholders  of record at the
close of business on April 19, 1998.  Each Right entitles the registered  holder
to purchase from the Company a unit consisting of one  one-hundredth  of a share
(a "Unit") of Series B Junior  Participating  Preferred  Stock, no par value per
share (the "Preferred Stock") at a Purchase Price of $15.00 per Unit, subject to
adjustment.  The  description  and terms of the Rights are set forth in a Rights
Agreement (the "Rights  Agreement") between the Company and Chase Bank of Texas,
National Association, a national banking association, as Rights Agent.

         Initially, the Rights will be attached to all Common Stock certificates
representing  shares then outstanding,  and no separate Rights Certificates will
be  distributed.   The  Rights  will  separate  from  the  Common  Stock  and  a
Distribution  Date will occur upon the earlier of (i) 15 days following a public
announcement  that a person or group of  affiliated  or  associated  persons (an
"Acquiring Person") has acquired,  or obtained the right to acquire,  beneficial
ownership of 15% or more of the  outstanding  shares of Common Stock (the "Stock
Acquisition  Date"),  or (ii) 15 business days following the  commencement  of a
tender  offer  or  exchange  offer  that  would  result  in a  person  or  group
beneficially  owning  20% or more of such  outstanding  shares of Common  Stock.
Until the  Distribution  Date,  (i) the Rights will be  evidenced  by the Common
Stock  certificates and will be transferred with and only with such Common Stock
certificates,  (ii) new Common Stock  certificates  issued after April 19, 1998,
will contain a notation  incorporating  the Rights  Agreement  by reference  and
(iii)  the  surrender  for  transfer  of  any   certificates  for  Common  Stock
outstanding will also constitute the transfer of the Rights  associated with the
Common Stock represented by such certificate.

         The Rights are not  exercisable  until the  Distribution  Date and will
expire at the close of business on April 19, 2008,  unless  earlier  redeemed by
the Company as described below. As long as the rights are attached to the Common
Stock,  one additional  Right shall be deemed to be delivered with each share of
Common Stock issued or transferred  by the Company in the future,  including but
not limited to shares of Common Stock issuable upon  conversion of any series of
convertible  preferred  stock or debt  instruments  of the Company and shares of
Common Stock issuable upon exercise of options to purchase  Common Stock granted
by the Company.

         As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to  holders  of  record  of the  Common  Stock as of the close of
business  on  the  Distribution  Date  and,  thereafter,   the  separate  Rights
Certificates alone will represent the Rights.  Except as otherwise determined by
the  Board of  Directors,  only  shares  of  Common  Stock  issued  prior to the
Distribution Date will be issued with Rights.

         In the event that, at any time following the Distribution Date, (i) the
Company is the surviving  corporation  in a merger with an Acquiring  Person and
its  Common  Stock  is not  changed  or  exchanged,  (ii) a Person  becomes  the
beneficial owner of more than 20% of the then outstanding shares of Common Stock
(except  pursuant to an offer for all  outstanding  shares of Common Stock which
the  independent  directors  determine  to be fair to and  otherwise in the best
interests  of the  Company  and its  shareholders),  (iii) an  Acquiring  Person
engages in one or more  "self-dealing"  transactions  as set forth in the Rights
Agreement,  or (iv) during such time as there is an Acquiring  Person,  an event
occurs  which  results  in such  Acquiring  Person's  ownership  interest  being
increased by more than 1% (e.g., a reverse stock split),  each holder of a Right
will thereafter have the right to receive,  upon exercise,  Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the exercise price of the Right.  Notwithstanding any
of the  foregoing,  following  the  occurrence of any of the events set forth in
this paragraph,  all Rights that are, or (under certain circumstances  specified
in the Rights Agreement) were,  beneficially  owned by any Acquiring Person will
be null and void. However,  Rights are not exercisable  following the occurrence
of either of the  events  set forth  above  until such time as the Rights are no
longer redeemable by the Company as set forth below.

         In the event that, at any time  following the Stock  Acquisition  Date,
(i)  the  Company  is  acquired  in  a  merger  or  other  business  combination
transaction in which the Company is not the surviving  corporation (other than a
merger  described in the next  preceding  paragraph or a merger which follows an
offer  described in the next  preceding  paragraph),  or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except  Rights  which  previously  have been voided as set forth  above)  shall
thereafter  have the  right  to  receive,  upon  exercise,  common  stock of the
acquiring  company  having a value equal to two times the exercise  price of the
Right.  The  events  set  forth  in this  paragraph  and in the  next  preceding
paragraph are referred to as the "Triggering Events."

         The Purchase Price payable,  and the number of Units of Preferred Stock
or other  securities  or  property  issuable,  upon  exercise  of the Rights are
subject to adjustment from time to time to prevent  dilution (i) in the event of
a stock dividend on, or a subdivision,  combination or reclassification  of, the
Preferred  Stock,  (ii) if holders of the  Preferred  Stock are granted  certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current  market price of the  Preferred  Stock,  or (iii) upon the
distribution  to holders of the Preferred  Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).

         With certain  exceptions,  no adjustment in the Purchase  Price will be
required  until  cumulative  adjustments  amount to at least 1% of the  Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the  Preferred  Stock on the last
trading date prior to the date of exercise.

         At any time until fifteen days  following the Stock  Acquisition  Date,
the Company may redeem the Rights in whole,  but not in part, at a price of $.01
per  Right  (payable  in  cash,  Common  Stock  or  other  consideration  deemed
appropriate by the Board of Directors). Under certain circumstances set forth in
the Rights Agreement,  the decision to redeem shall require the concurrence of a
majority of the Continuing  Directors.  After the redemption period has expired,
the  Company's  right of redemption  may be  reinstated  if an Acquiring  Person
reduces his  beneficial  ownership to 10% or less of the  outstanding  shares of
Common  Stock in a  transaction  or series of  transactions  not  involving  the
Company.  Immediately  upon  the  action  of the  Board  of  Directors  ordering
redemption  of  the  Rights,  with,  where  required,  the  concurrence  of  the
Continuing  Directors,  the  Rights  will  terminate  and the only  right of the
holders of Rights will be to receive the $.01 redemption price.

         The term  "Continuing  Directors"  means  any  member  of the  Board of
Directors  of the Company who was a member of the Board prior to the date of the
Rights  Agreement,  and any person who is  subsequently  elected to the Board if
such  person  is  recommended  or  approved  by a  majority  of  the  Continuing
Directors,  but shall not  include  an  Acquiring  Person,  or an  affiliate  or
associate  of an  Acquiring  Person,  or any  representative  of  the  foregoing
entities.

         Until a Right is exercised,  the holder thereof,  as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive  dividends.  While the distribution of the Rights will not
be taxable to stockholders or to the Company,  stockholders may,  depending upon
the circumstances,  recognize taxable income in the event that the Rights become
exercisable  for Common  Stock (or other  consideration)  of the  Company or for
common stock of the acquiring company as set forth above.

         Other than those provisions relating to the principal economic terms of
the Rights,  any of the provisions of the Rights Agreement may be amended by the
Board of  Directors of the Company  prior to the  Distribution  Date.  After the
Distribution  Date, the provisions of the Rights Agreement may be amended by the
Board  (in  certain  circumstances,  with  the  concurrence  of  the  Continuing
Directors)  in  order  to cure  any  ambiguity,  to make  changes  which  do not
adversely affect the interests of holders of Rights  (excluding the interests of
any  Acquiring  Person),  or to shorten or lengthen  any time  period  under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing  redemption  shall  be  made  at  such  time  as the  Rights  are  not
redeemable.

         As of April 6,  1998,  there  were  32,201,764  shares of Common  Stock
outstanding and 2,922,059  shares of Common Stock reserved for issuance upon the
exercise of options and warrants. In addition, the Company held 4,352,442 shares
of Common  Stock in  treasury  as of April 6, 1998.  Each  outstanding  share of
Common Stock on April 19, 1998,  will entitle the holder  thereof to receive one
Right.  In  addition,  the Company will issue one Right for each share of Common
Stock that becomes outstanding between the Record Date and the Distribution Date
(or the earlier  expiration,  exchange or  redemption of the Rights) so that all
such shares will have attached Rights.

         The Rights have certain  anti-takeover  effects.  The Rights will cause
substantial  dilution to a person or group that  attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
The Rights should not interfere  with any merger or other  business  combination
approved by the Board of Directors  of the Company  since the Board of Directors
may,  at its  option,  at any time  prior to the  fifteenth  day after the Stock
Acquisition Date,  redeem all but not less than all the then outstanding  Rights
at the Redemption Price. A copy of the press release  announcing the dividend is
filed as Exhibit 99.1 and is hereby incorporated herein by reference.

Item 7.   Financial Statements and Exhibits.

         (c)      Exhibits.

        99.1      -  Press  release  of the  Registrant  dated  April  9,  1998,
                  announcing the dividend distribution of Rights.

<PAGE>
                                   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 hereunto duly authorized.

Dated:  April 9, 1998

                                            KANEB SERVICES, INC.



                                            By:             //s//
                                            Name:  Howard C. Wadsworth
                                            Title:  Vice President and Treasurer


<PAGE>

                                INDEX TO EXHIBITS


Number    Exhibit 

99.1      Press release of the  Registrant  dated April 9, 1998,  announcing the
          dividend distribution of Rights.
[{"type": "8-K", "sequence": "1", "description": "STOCKHOLDER RIGHTS PLAN", "secsgml_size_bytes": 13195}]
{"company-data": {"conformed-name": "KANEB SERVICES INC", "cik": "0000054441", "assigned-sic": "1700", "irs-number": "751191271", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-05083", "film-number": "98590391"}, "business-address": {"street1": "2435 N. CENTRAL EXPRESSWAY", "street2": "SUITE 700", "city": "RICHARDSON", "state": "TX", "zip": "75080", "phone": "2146994000"}, "mail-address": {"street1": "P O BOX 650283", "city": "DALLAS", "state": "TX", "zip": "75265-0283"}, "former-company": {"former-conformed-name": "KANEB PIPE LINE CO", "date-changed": "19710610"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

         Date of Report (Date of earliest event reported): April 9, 1998

                              KANEB SERVICES, INC.
               (Exact name of registrant as specified in charter)

       Delaware                        1-5083                    74-1191271
(State of Incorporation)       (Commission File No.)          (I.R.S. Employer 
                                                             Identification No.)

       2435 North Central Expressway
       Richardson, Texas                                        75080
       (Address of Principal Executive Offices)              (Zip Code)

       Registrant's telephone number, including area code: (972) 699-4000
Item 5.   Other Events.

         On April 9, 1998, the Board of Directors of Kaneb  Services,  Inc. (the
"Company")  declared a dividend  distribution of one Right for each  outstanding
share of Kaneb  Services,  Inc.  Common Stock to  stockholders  of record at the
close of business on April 19, 1998.  Each Right entitles the registered  holder
to purchase from the Company a unit consisting of one  one-hundredth  of a share
(a "Unit") of Series B Junior  Participating  Preferred  Stock, no par value per
share (the "Preferred Stock") at a Purchase Price of $15.00 per Unit, subject to
adjustment.  The  description  and terms of the Rights are set forth in a Rights
Agreement (the "Rights  Agreement") between the Company and Chase Bank of Texas,
National Association, a national banking association, as Rights Agent.

         Initially, the Rights will be attached to all Common Stock certificates
representing  shares then outstanding,  and no separate Rights Certificates will
be  distributed.   The  Rights  will  separate  from  the  Common  Stock  and  a
Distribution  Date will occur upon the earlier of (i) 15 days following a public
announcement  that a person or group of  affiliated  or  associated  persons (an
"Acquiring Person") has acquired,  or obtained the right to acquire,  beneficial
ownership of 15% or more of the  outstanding  shares of Common Stock (the "Stock
Acquisition  Date"),  or (ii) 15 business days following the  commencement  of a
tender  offer  or  exchange  offer  that  would  result  in a  person  or  group
beneficially  owning  20% or more of such  outstanding  shares of Common  Stock.
Until the  Distribution  Date,  (i) the Rights will be  evidenced  by the Common
Stock  certificates and will be transferred with and only with such Common Stock
certificates,  (ii) new Common Stock  certificates  issued after April 19, 1998,
will contain a notation  incorporating  the Rights  Agreement  by reference  and
(iii)  the  surrender  for  transfer  of  any   certificates  for  Common  Stock
outstanding will also constitute the transfer of the Rights  associated with the
Common Stock represented by such certificate.

         The Rights are not  exercisable  until the  Distribution  Date and will
expire at the close of business on April 19, 2008,  unless  earlier  redeemed by
the Company as described below. As long as the rights are attached to the Common
Stock,  one additional  Right shall be deemed to be delivered with each share of
Common Stock issued or transferred  by the Company in the future,  including but
not limited to shares of Common Stock issuable upon  conversion of any series of
convertible  preferred  stock or debt  instruments  of the Company and shares of
Common Stock issuable upon exercise of options to purchase  Common Stock granted
by the Company.

         As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to  holders  of  record  of the  Common  Stock as of the close of
business  on  the  Distribution  Date  and,  thereafter,   the  separate  Rights
Certificates alone will represent the Rights.  Except as otherwise determined by
the  Board of  Directors,  only  shares  of  Common  Stock  issued  prior to the
Distribution Date will be issued with Rights.

         In the event that, at any time following the Distribution Date, (i) the
Company is the surviving  corporation  in a merger with an Acquiring  Person and
its  Common  Stock  is not  changed  or  exchanged,  (ii) a Person  becomes  the
beneficial owner of more than 20% of the then outstanding shares of Common Stock
(except  pursuant to an offer for all  outstanding  shares of Common Stock which
the  independent  directors  determine  to be fair to and  otherwise in the best
interests  of the  Company  and its  shareholders),  (iii) an  Acquiring  Person
engages in one or more  "self-dealing"  transactions  as set forth in the Rights
Agreement,  or (iv) during such time as there is an Acquiring  Person,  an event
occurs  which  results  in such  Acquiring  Person's  ownership  interest  being
increased by more than 1% (e.g., a reverse stock split),  each holder of a Right
will thereafter have the right to receive,  upon exercise,  Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the exercise price of the Right.  Notwithstanding any
of the  foregoing,  following  the  occurrence of any of the events set forth in
this paragraph,  all Rights that are, or (under certain circumstances  specified
in the Rights Agreement) were,  beneficially  owned by any Acquiring Person will
be null and void. However,  Rights are not exercisable  following the occurrence
of either of the  events  set forth  above  until such time as the Rights are no
longer redeemable by the Company as set forth below.

         In the event that, at any time  following the Stock  Acquisition  Date,
(i)  the  Company  is  acquired  in  a  merger  or  other  business  combination
transaction in which the Company is not the surviving  corporation (other than a
merger  described in the next  preceding  paragraph or a merger which follows an
offer  described in the next  preceding  paragraph),  or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except  Rights  which  previously  have been voided as set forth  above)  shall
thereafter  have the  right  to  receive,  upon  exercise,  common  stock of the
acquiring  company  having a value equal to two times the exercise  price of the
Right.  The  events  set  forth  in this  paragraph  and in the  next  preceding
paragraph are referred to as the "Triggering Events."

         The Purchase Price payable,  and the number of Units of Preferred Stock
or other  securities  or  property  issuable,  upon  exercise  of the Rights are
subject to adjustment from time to time to prevent  dilution (i) in the event of
a stock dividend on, or a subdivision,  combination or reclassification  of, the
Preferred  Stock,  (ii) if holders of the  Preferred  Stock are granted  certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current  market price of the  Preferred  Stock,  or (iii) upon the
distribution  to holders of the Preferred  Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).

         With certain  exceptions,  no adjustment in the Purchase  Price will be
required  until  cumulative  adjustments  amount to at least 1% of the  Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the  Preferred  Stock on the last
trading date prior to the date of exercise.

         At any time until fifteen days  following the Stock  Acquisition  Date,
the Company may redeem the Rights in whole,  but not in part, at a price of $.01
per  Right  (payable  in  cash,  Common  Stock  or  other  consideration  deemed
appropriate by the Board of Directors). Under certain circumstances set forth in
the Rights Agreement,  the decision to redeem shall require the concurrence of a
majority of the Continuing  Directors.  After the redemption period has expired,
the  Company's  right of redemption  may be  reinstated  if an Acquiring  Person
reduces his  beneficial  ownership to 10% or less of the  outstanding  shares of
Common  Stock in a  transaction  or series of  transactions  not  involving  the
Company.  Immediately  upon  the  action  of the  Board  of  Directors  ordering
redemption  of  the  Rights,  with,  where  required,  the  concurrence  of  the
Continuing  Directors,  the  Rights  will  terminate  and the only  right of the
holders of Rights will be to receive the $.01 redemption price.

         The term  "Continuing  Directors"  means  any  member  of the  Board of
Directors  of the Company who was a member of the Board prior to the date of the
Rights  Agreement,  and any person who is  subsequently  elected to the Board if
such  person  is  recommended  or  approved  by a  majority  of  the  Continuing
Directors,  but shall not  include  an  Acquiring  Person,  or an  affiliate  or
associate  of an  Acquiring  Person,  or any  representative  of  the  foregoing
entities.

         Until a Right is exercised,  the holder thereof,  as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive  dividends.  While the distribution of the Rights will not
be taxable to stockholders or to the Company,  stockholders may,  depending upon
the circumstances,  recognize taxable income in the event that the Rights become
exercisable  for Common  Stock (or other  consideration)  of the  Company or for
common stock of the acquiring company as set forth above.

         Other than those provisions relating to the principal economic terms of
the Rights,  any of the provisions of the Rights Agreement may be amended by the
Board of  Directors of the Company  prior to the  Distribution  Date.  After the
Distribution  Date, the provisions of the Rights Agreement may be amended by the
Board  (in  certain  circumstances,  with  the  concurrence  of  the  Continuing
Directors)  in  order  to cure  any  ambiguity,  to make  changes  which  do not
adversely affect the interests of holders of Rights  (excluding the interests of
any  Acquiring  Person),  or to shorten or lengthen  any time  period  under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing  redemption  shall  be  made  at  such  time  as the  Rights  are  not
redeemable.

         As of April 6,  1998,  there  were  32,201,764  shares of Common  Stock
outstanding and 2,922,059  shares of Common Stock reserved for issuance upon the
exercise of options and warrants. In addition, the Company held 4,352,442 shares
of Common  Stock in  treasury  as of April 6, 1998.  Each  outstanding  share of
Common Stock on April 19, 1998,  will entitle the holder  thereof to receive one
Right.  In  addition,  the Company will issue one Right for each share of Common
Stock that becomes outstanding between the Record Date and the Distribution Date
(or the earlier  expiration,  exchange or  redemption of the Rights) so that all
such shares will have attached Rights.

         The Rights have certain  anti-takeover  effects.  The Rights will cause
substantial  dilution to a person or group that  attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
The Rights should not interfere  with any merger or other  business  combination
approved by the Board of Directors  of the Company  since the Board of Directors
may,  at its  option,  at any time  prior to the  fifteenth  day after the Stock
Acquisition Date,  redeem all but not less than all the then outstanding  Rights
at the Redemption Price. A copy of the press release  announcing the dividend is
filed as Exhibit 99.1 and is hereby incorporated herein by reference.

Item 7.   Financial Statements and Exhibits.

         (c)      Exhibits.

        99.1      -  Press  release  of the  Registrant  dated  April  9,  1998,
                  announcing the dividend distribution of Rights.
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 hereunto duly authorized.

Dated:  April 9, 1998

                                            KANEB SERVICES, INC.

                                            By:             //s//
                                            Name:  Howard C. Wadsworth
                                            Title:  Vice President and Treasurer
INDEX TO EXHIBITS

Number    Exhibit 

99.1      Press release of the  Registrant  dated April 9, 1998,  announcing the
          dividend distribution of Rights.