[ The Real McCoy Online Home ]                                                                                                                     April 22, 2011

Survey indicates Exchange gas stations offer value at pump

FORT MCCOY, Wis. (Army and Air Force Exchange Service) — A recent Chicago Sun Times article quoted oil industry experts predicting that gas prices will continue past $4 and could hit $5 a gallon, possibly in the next few months. This potentially large spike in gas prices has Exchange officials reaching to ensure drivers are aware of the procedures in place to determine pump prices at Fort McCoy as well as the benefits available to authorized patrons.

While overall energy prices are beyond the Army & Air Force Exchange Service’s (AAFES) control, the Military StarŪ Card, for example, 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 Fort McCoy Exchange Store Manager Neal Smart. “Because the Military StarŪ Card is administered by the Exchange Credit Program, our gas station is 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 StarŪ Card holders enjoy every day, the Fort McCoy gas station periodically offers steeper discounts during certain holidays, Smart said.

Beyond exclusive discounts, Exchange gas stations rely on a survey process to ensure prices are fair and competitive with the local community.

Specifically, the Exchange conducts daily surveys of at least five locations selling motor fuel, deemed by the local AAFES general manager to be the competition. Pump prices then are 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,” said Smart. “In fact, even though the gas station charges sales tax on gasoline, the surveys can result in prices that are actually even below cost.”

While it is true that the Exchange, as a U.S. government instrumentality, is immune from state and local taxes, the immunity specific to fuel has been waived by Congress (Hayden Cartwright Act, 4 U.S. Code (U.S.C.) 104).

Charging sales tax can be like pulling the emergency brake on shoppers used to the tax-free benefit that the Exchange provides on almost everything, except gas. But the Exchange, and by extension its customers, is required to pay federal tax pursuant to U.S.C. 26 and 4081(a)).

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

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

For more information about AAFES at Fort McCoy, call 608-269-5585 or visit the website shopmyexchange.com.

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