AND IN THIS CORNER...\As gas station proprietors pump up for competition, snazzy new\equipment, convenience stores go toe to toe with low prices, prime\locations to attract customers.

Byline: Elizabeth M. Cosin Daily News Staff Writer

Mario Iabbi can't make a move most days without one of his competitor neighbors knowing about it.

He has a rival in every direction, each vigilantly vying for the business that speeds by on six lanes of asphalt.

Iabbi's bright blue-and-white Sepulveda Chevron holds its own on the northeast corner of Sepulveda Boulevard and Sherman Way, one of the busiest intersections in the Valley.

Here on this quasi-commercial spot in Van Nuys, where rush hour sounds like a freeway, the four fill-'em-ups are locked in a standoff.

This is ground zero in what may be the fiercest gas station battlefield in the nation.

"It's a great place to have a station. But you have to be always watching. It's very competitive. You have to keep an eye on what everyone else is doing," said Iabbi, whose station has been completely redone since he began operating it five years ago.

Across Sepulveda, Gus' Mobil has just installed the latest fuel technology - pumps that dispense gas at a rate of 10 gallons per minute. Soon, the station will complete a new, larger convenience store.

Catty-corner is the fading 76 Unocal, which has applied for a renovation permit.

Sepulveda Shell on the remaining corner got all new pumps three months ago, and the owners are considering more renovations during the next two years.

The target? Los Angeles drivers, the toughest, most practiced urban road warriors. Here in the Valley of vehicles, getting a driver to veer off course might be harder than getting someone to believe in the 20-minute commute.

Unless, of course, he has to get to a favorite gas station. Miguel Herrera often goes out of his way to fill up his silver Ford Taurus at Gus' Mobil.

"Today I could have gotten on the freeway sooner, but I went a few more blocks to come here," said Herrera, a Van Nuys travel agent. "At the moment, it's my favorite place."

Words that please owner Gus Chahayed, who has kept a foothold on the northwest corner here since 1985, all the while, like Mario Iabbi, watching over the constantly changing landscape around him.

"Everybody is always doing something," Chahayed said.

Standing next to the trailer that is serving as a temporary home to his convenience store, Chahayed speaks with pride about customers like Herrera. They are the reason he asked Mobil to let him build a bigger store.

But if he hadn't asked, it is almost certain Mobil would have insisted. As part of a program it calls "On the Run," Mobil plans to add new, larger convenience stores (2,500 to 3,000 square feet) to most of its stations that now have only garages or service bays.

Rebuilding, remodeling, renovating. They are buzzwords for the gas-station owners of the '90s, who have been taking redevelopment to a new, kind of micro-level. Gas sales, it seems, don't really fuel the, er, proverbial fire, so convenience stores, car washes and the like have largely replaced the traditional gas station.

"We don't make any money on selling gas," said Ahsan Rehman, manager of the Texaco station at Ventura Boulevard and Ventura Place in Sherman Oaks. "The most I can hope for is to break even."

Atlantic Richfield Co. pioneered cut-rate gas prices 20 years ago in an effort to grab a larger market share. At the same time, the company was the first big chain to use the convenience store layout by introducing the AM/PM market.

But in 1983, Arco revolutionized the industry by trashing its own credit-card operations, hoping the huge savings would lower gas prices. It was a big success in an industry in which prices have remained low, and it forced others to follow suit.

The convenience stores are a way to offset the low gas prices, but the credit card is back in big demand - only this time, it doesn't necessarily have the oil company's name on it.

The emphasis now is on clean and quick, pay-at-the-pump fueling. While many gas stations, like Rehman's, still have auto repair shops, most have turned into food-shop vendors with gasoline on the side.

And while full-service islands still exist, pumping your own is the method of choice. Most managers and owners contend that more than half their customers pay at the pump, which means pull in, stick a credit card in a slot on the pump, pump the gas and go - without ever seeing an attendant.

Could manless stations be just beyond the next exit as we travel the asphalt highway?

"The technology is out there," said James Copeland, Mobil's programs coordinator for its Los Angeles District, an area that covers more than 500 stations between San Luis Obispo and San Diego.

"It's already being used overseas, but I wouldn't expect to see it here any time soon. What you'll be seeing is what's been going on for a while. That is, gas stations trading in service bays for convenience stores and car washes."

That means that bigger, shinier and faster really is better if you are an oil company looking for a way to turn a profit.

"Brand loyalty is what you are after," said Texaco spokesman Phil Blackburn, who acknowledged that the process of retooling stations is an ongoing one. "You want to keep the customers you have and develop ties with the younger, mobile, more active customer who wants to do more than just get gas when he or she stops at a station. It's not just getting gas anymore."

Clearly, the oil companies know this.

Mobil, for example, is so enamored of those faster-fueling pumps it just installed at Gus' Mobil that it has designed an entire advertising campaign around them. The centerpiece is a billboard ad featuring a picture of said pump and the legend: "New, Fast, Sporty."

Unocal has been trying out a mini-video at the pump that plays a commercial every time someone fills up. In the works as well are touch-screen pump menus and other electronic gizmos. At the service station near you, you might find a Taco Bell, Blimpie or KFC so you can fuel your stomach along with your car without being stuck with a microwave hot dog.

"We want gas stations to be whole destinations apart from just a place to get gas," Mobil's Copeland said. "We'd like it to be more like a supermarket express lane. So that when someone thinks about going to get a meal or a loaf of bread or something they normally would get at the supermarket, they would think Mobil."

Clearly, the oil companies are convinced that newer and cleaner is better, too. Though none will say what their own studies have told them in this regard, the upgraded stations are looking quite spiffy, thank you.

While all of this may seem enticing, even the oil companies admit that when it gets right down to it, it's price and convenience that bring people in.

That's what companies like Arco and Thrifty have banked on by keeping service amenities to a minimum in order to maintain the lowest prices.

"The fact is that low-priced stations make it hard to compete," Blackburn said. "If the guy across the street is a penny or two a gallon below you, then you might lose business. So everyone has to be price-competitive."

For Anne Segal, bells and whistles, or even price, aren't what fuels her decision to keep returning to Ahsan Rehman's Texaco.

"This is one place I always like to go to because the people are so friendly," she said. "I do look for the least expensive places, but it depends a lot on whatever happens to be available at the time. Sometimes I just go to the place that's most convenient. But I like the people here."

It's a concept not lost on those at gas station ground zero.

"I want my customers to be happy, so I'm making some changes," Chahayed said. He takes a moment to survey his competitors, then shakes his head and smiles.

"Everybody wants to be on this corner. Nobody's giving up."

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Photo (1--Cover--Color) PUMP WARS Gas station owners are competing for your fuel dollars with convenience stores, high-tech pumps and fancy renovations (2--Color) If customer loyalty is the prize, Gus' Mobil is the winner. "I went a few more blocks to come here," says Miguel Herrera, with credit card in mouth. "At the moment, it's my favorite place." (3--Color) Figuring that price and convenience bring people in, low-tech facilities such as Thrifty stations keep service amenities to a minimum in order to maintain the lowest prices. (4--Color) "You have to keep an eye on what everyone else is doing," says Mario Iabbi, whose Sepulveda Chevron is at one of the busiest intersections in the Valley. (5--Color) Flowers brighten up Willie Ayoub's Valley Village Shell at Magnolia Boulevard and Coldwater Canyon Avenue. Ayoub says he plans to remodel the station next year. (6--Color) no caption (Mobil pump sign) Michael Owen Baker/Daily News