North Shore BP stations running on empty

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Ziad Nabbout stands at his BP station yesterday on Jackson Street in Salem. Ken Yuszkus/Staff photo

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April 14, 2012

North Shore BP stations running on empty

By Ethan Forman Staff writer The Salem News Sat Apr 14, 2012, 04:48 AM EDT

SALEM — Several parked cars yesterday barricaded the pumps at the BP gas station at 94 Jackson St.

Customers drove in, drivers sat bemused for a few moments, then circled out of the station.

It's not the only local BP gas station running on empty nowadays.

In Beverly, at the BP station at 491 Cabot St., a sign on the pump reads: "Sorry, only special."

The BP station in Danvers, at 3 Sylvan St., is also without gas.

The lack of gas at local BP stations is due to financial difficulties by local and national suppliers, and not due to local gas dealers or British Petroleum, said Matthew LeLacheur, executive director of the New England Service Station and Auto Repair Association.

The difficulties involve a regional distributor called Green Valley Oil of East Providence, R.I., with whom BP planned to end its contract yesterday. Green Valley Oil supplied 218 stations, including 122 in Massachusetts, 55 in Connecticut, 22 in New Hampshire and 19 in Rhode Island, according to BP, which hoped to make new arrangements to find a gas supplier for these stations by the end of the month.

"We apologize for any inconvenience this may cause motorists during this transition period," BP America said in a statement.

In a nutshell, the supply disruptions can be traced to financial difficulties at Getty Petroleum Marketing, which filed for bankruptcy late last year. These difficulties apparently trickled down to Green Valley Oil, which sublet Getty Petroleum's business of collecting rents and organizing supply agreements, among other things, LeLacheur said.

The problem is exacerbated because most dealers are consignment dealers or agents who don't buy the gas, but simply set a markup on it, he said. In that case, they can't go elsewhere to find a supplier.

While the matter is a legal and financial tangle involving several distant companies, for the owner of the BP station on Jackson Street, Salem resident Ziad Nabbout, the matter is a simple one.

He paid his rent, more than $5,775 on April 1, and Green Valley Oil stopped delivering his gas.

"They are killing us," he said of the supply disruption.

About a month ago, deliveries started to dry up and became less frequent, Nabbout said.

"No additional allocation until Monday," a text from his supplier on his cellphone reads. He hasn't had a delivery since March 30. Commercial customers have gone elsewhere, and he continues to pay his employees' salary and workers compensation insurance, even though there's no gas for them to pump.

A new supplier, Lehigh Gas of Pennsylvania, is taking over, Nabbout said, but that may not happen until May 1. After consulting with a lawyer, he is exploring whether he can buy gas from another supplier in the meantime, given that his supplier has broken the terms of his lease, he said.

Nabbout's cousin started the business in 1987, and he took over in 2002. He has another BP station in Hyde Park that is going through the same thing. Nabbout, who has a long-term lease, also worries that the new supplier will ask for a new security deposit, which is more than $100,000.

While he still is servicing cars and selling them, gas sales are vital.

"It keeps the station alive," Nabbout said.

BP said in a statement on Thursday that it was taking steps to address the supply disruptions to stations in the region and hoped to resolve the situation by the end of the month.

Nabbout said BP has not done anything for him, but the company should, given it's their logo on his station's sign.

With his pumps closed, Nabbout said he appreciated his customers' support.

"Soon we will be back in business," he said, "and we hope to do the best to please them."

Staff writer Ethan Forman can be reached at 978-338-2673 or by email at eforman@salemnews.com or on Twitter @DanverSalemNews.