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Former Arco station back in business selling gas at $2.99 a gallon

Post by John Gillie / The News Tribune on Jan. 14, 2013 at 10:45 am |
January 14, 2013 3:11 pm

A former high volume Arco station, closed down for more than a year because of a legal battle between the station owner and Arco, is back in business today and selling gas for $2.99 a gallon.

Hatem Shalabi, the station’s owner said a court victory in California against Arco’s parent company, BP, has opened the door to a new supply of fuel for his huge station at Portland and Puyallup avenues.

Lina Levchyk ties balloons in celebration around the former ARCO gas station at the intersection of Portland Avenue and Puyallup Avenue on Monday. (Peter Haley/staff photographer)
Lina Levchyk ties balloons in celebration around the former ARCO gas station at the intersection of Portland Avenue and Puyallup Avenue on Monday. (Peter Haley/staff photographer)

Shalabi said he’s set the price for unleaded regular at $2.99 to celebrate his return to business. The station is now unbranded.

IPC USA, a subsidiary of the Japanese trading company ITOCHO Petroleum Japan, won dismissal of a case in California’s Orange County Superior Court in which BP sought to block the fuel distributor from selling gas to Shalabi.

“Thank God and my customers for supporting me in this victory,” said Shalabi.

The station owner is still scheduled to go to trial in Seattle federal court in October in a larger case that revolves around the question of whether Arco can force him to sell only own their brand of gas.

Shalabi said he plans to file a new suit against Arco to compensate him for lost revenues during the time he shut down his stations for lack of gas.

Arco cut off Shalabi and his string of Arco branded stations in the summer of 2011 after the oil company claimed Shalabi didn’t pay for its supply of gasoline quickly enough.

Shalabi claimed Arco was manipulating the wholesale price of gas in a way that made his operations only marginally profitable. The station owner contended that the company failed to inform him of environmental issues at the station sites when he purchased stations from Arco.

Arco countered that Shalabi’s purchase contract obligated him to buy gas only from Arco for 20 years.

When the company halted its delivery of gasoline, Shalabi obscured the Arco labels on the pumps, covered up Arco signs and taped over other identifying marks in the AM-PM convenience stores associated with the stations.

Arco contended the stations were still identifiable as Arco stations.

Shalabi at first found alternate supplies of gas for his stations, but Arco pressured distributors to cut him off and when IPC stepped into supply Shalabi fuel, the petroleum giant sued the company in California.

Shalabi has leased all but 10 of original stations throughout Western Washington to other operators who have returned to selling Arco gas.

The immigrant station operator said he’s on the verge of leasing nine of his remaining stations to a new operator who will return them to sales as Arco stations. He will retain only his largest station at Puyallup and Portland avenues in Tacoma.

“After this experience, I can’t get out of the gasoline business fast enough,” he said.

He claimed that Arco tried to persuade his bank to foreclose on him and has pressured suppliers to cut off services.

“I’ve had to borrow a lot of money to continue to make my payments,” he said.

He and his legal team plan to meet with Arco Tuesday to explore a settlement for the suits.

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