AAFES explains pricing
October 15, 2008
SCHOFIELD BARRACKS, Hawaii - While the price of crude oil has increased steadily over the last decade, gasoline prices in Hawaii have been decreasing over the past few weeks.
However, patrons filling up their cars on post at Army & Air Force Exchange Service (AAFES) gas stations don't always see their prices decreasing at the same time.
"Our contract for gas is out of the Gulf Coast Region," AAFES General Manager Mark Polczynski explained, "(whereas,) "local stations may be purchasing through the Asian market."
Despite cost differences due to regional suppliers, AAFES sets its sell price - the price patrons pay per gallon - based on the local competition.
"Prices will be set equal to the lowest-surveyed price for each grade of fuel sold," said Rick Fair, retail business manager, AAFES. "Stations selected to survey are based on proximity to military installations. If one of the survey stations is selling below our cost, we will still match the price."
Recently, the cost prices - what AAFES pays for the gas - have increased more than 26 cents a gallon each for regular, midgrade and premium gas.
"(The recent) increase in cost was associated with the closing of the refineries in preparation of Hurricane Ike," Polczynski said. AAFES' contracting offices anticipate "the cost price will be lower for this coming week," allowing AAFES to pass its savings on to the customer.
In an effort to keep costs down for the customer, AAFES gas stations pursue other gas sources, if possible, and accept Navy Exchange (NEX) discount cards (although AAFES is prohibited from stamping them)..
"We are looking to see if we can obtain some of our fuel from a local source with the reduced cost price," Polczynski said. "Last time we did this, it was unsuccessful, as they could not support our requirements and often did not deliver on a timely basis."
AAFES determines its gas prices by analyzing the national average within the continental U.S. (CONUS).
"Market-based pricing of gasoline provides the continental United States customer a competitive price no matter where the exchange is located," Fair said. "AAFES prices gasoline by surveying the local market in CONUS as frequently as necessary to stay competitively priced on this commodity. Currently, AAFES Hawaii is surveying daily to include Saturday and Sunday."
By matching the local competition, accepting neighboring facilities' coupons and seeking alternative and cheaper fuel sources, AAFES strives to continue providing quality merchandise and services to its customers at competitively low prices - all while generating earnings.
Earnings from AAFES operations fund Family and Morale, Welfare and Recreation (FMWR) programs, as well as new and improved exchange stores.
Have questions on AAFES gas policies' Call the general manager at 808-423-8632.