Houston Chron

June 26, 2001, 11:13PM

99-cents-a-gallon gas drives stores' war

By RICHARD STEWART Copyright 2001 Houston ChronicleEast Texas Bureau

BEAUMONT -- A good old-fashioned gas war has motorists flocking to the small East Texas town of Buna, where the price of a gallon recently has dipped as low as 99 cents.

An upstart station owner is accused of sparking the competition, which has dealers grumbling and drivers celebrating.

"If I wanted to get customers, I had to lower my price," said Mohammad Mukhtar, who purchased a Stop-N-Go last week and promptly cut the price of Citgo gas from $1.469 a gallon to $1.399.

Other stations responded by dropping their prices even more, and Mukhtar went lower yet.

"I changed my gas prices 10 times on Monday," he said.

By Tuesday, the price of gas was 98.9 cents, and when clerk Brenda Ward arrived to open the station, she found cars filling the parking lot.

"They were waiting for me," she said. "It's been nonstop all day."

While all this has been good news for motorists, it's been tough on dealers.

"I lost quite a lot of money yesterday," said John Jongebloed, who operates the Market Place convenience store, one of Mukhtar's major competitors.

"We all lost," he said.

Jongebloed said the several stores and stations that sell gas in the south Jasper County town all had about the same gas prices before Mukhtar started the cutting.

"He was very unreasonable," Jongebloed said. "He dropped gas prices 30 cents in one day."

The gas war has raised a lot of excitement in the town of about 2,500 just north of Beaumont on U.S. 96.

"People are telling me that they drove 40 miles to get here," one clerk reported.

It's about the biggest thing to hit Buna since the Redbud Festival, an event held every March, said Buna Chamber of Commerce President Lori Mixson.

"I came into town late last night to see cars lined up around the block to get into the Fina store (Market Place)," Mixson said.

By Tuesday the gas war showed signs of letting up.

Most other gasoline outlets had withdrawn from the battle, setting their prices for regular gasoline at $1.299 a gallon.

That's still a pretty good price for gasoline. A survey conducted for the American Automobile Association showed that the average price for regular gas in Houston was $1.558 last week.

But don't plan the road trip just yet.

Buna is 118 miles east of Houston.

-- Anonymous, June 27, 2001