Exchange strives to offer value at the pump for its authorized patrons

| June 2, 2011 | 0 Comments

Army and Air Force Exchange Service-Pacific Region
Public Affairs

The Exchange

The Exchange

SCHOFIELD BARRACKS — A recent Chicago Sun Times article quoted oil industry experts predicting that gas prices could hit $5 a gallon, possibly in the next few months.

This potentially large spike in gas prices has the Army and Air Force Exchange Service, otherwise known as the Exchange, reaching out to ensure drivers are aware of the procedures that determine pump prices, here, as well as the benefits available to authorized patrons.

While overall energy prices are beyond the Exchange’s control, the Military StarCard can help curb added expenses, and in turn, save Soldiers money when filling up.

“Anytime a customer uses a bank-issued debit or credit card, the retailer pays a portion of the transaction to a third-party financial institution,” said Floyd Wynn, general and area manager for Exchange-Hawaii. “Because the Military Star Card is administered by the Exchange Credit Program, our fuel pump locations are not subject to the additional fees incurred through other ‘pay at the pump’ options. As a result, we’re able to pass savings on to authorized shoppers by taking a nickel off each gallon dispensed.”

In addition to the five-cents-a-gallon savings Military Star Card holders enjoy every day, Exchange facilities periodically offer steeper discounts during certain holidays.

Exchange expresses, gas stations and car care centers also rely on a survey process to ensure prices are fair and competitive within the local community.

The Exchange conducts daily surveys of at least five locations selling motor fuel, deemed by the local general manager to be the competition. Pump prices are then set equal to the lowest price surveyed for each grade of fuel available.

“Because market-based pricing is not contingent on cost, we survey and change prices as frequently as necessary to remain competitive,” Wynn said. “In fact, even though Exchange facilities charge sales tax on gasoline, the surveys can result in prices that are actually even below cost.”

The Exchange, as a U.S. government instrumentality, is immune from state and local taxes, but Congress waived the immunity specific to fuel. The Exchange provides a tax-free benefit on almost everything, except gas. The Exchange and its customers are required to pay federal tax pursuant to the U.S. code that covers gasoline.

Accordingly, Exchange pump prices include state, federal and local motor fuel taxes, as well as underground storage fees. Federal and state taxes, and other applicable fees, are included in the gas price, and they are paid to the appropriate taxing authority.

“Gas pricing is a very complex issue, impacted by world markets, political and economic factors,” Wynn said. “With that said, we remain focused on delivering the best value possible to drivers at Schofield Barracks.”


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